RapidRatings

At least 20 percent of automotive suppliers are in financial distress and their leaders are more pessimistic about business conditions than they have been in years, two recent studies show.

Procurement professionals know that supplier selection is more than just sourcing the best materials and components at competitive prices; it's about building resilient supply networks and creating strong operational foundations.

This issues key takeaways: Risk exposure is not static — it changes along with economic fluctuations and business relationship changes between counterparties (a company and its supplier, a company with its customer, etc.). Inflation, tariffs, and increasing bankruptcy rates make having visibility into supplier risk crucial. The risk calculator is an interactive tool that helps companies evaluate risk levels in their supplier base, both with and without tariff stress applied. Detecting financial risk early gives companies much-needed optionality.

Financial services third-party risk management is no longer just about operational efficiency, it’s a regulatory compliance imperative.