Automakers Shift to Electronic Commerce with Purchase of Automotive Network Exchange

Strategic Insights -

As the auto industry transitions to electronic commerce, automakers are developing electronic marketplaces to conduct bidding and purchasing of auto parts and services. The General Motors Corporation and the Ford Motor Company are leading the charge, with G.M. planning to use its software on the Internet and Ford hoping to do so despite concerns about hacking. The Automotive Industry Action Group, a technology consortium of G.M., Ford, and DaimlerChrysler, sold the Automotive Network Exchange to Science Applications International Corporation, a San Diego-based company that will manage the network.

Key Takeaways:

  • The General Motors Corporation and the Ford Motor Company are developing software to set up electronic marketplaces on the Automotive Network Exchange next year.
  • The Automotive Network Exchange was sold to Science Applications International Corporation, a San Diego-based company, which will manage the network.
  • The data network offers tighter security than the Internet, with users having special phone lines to the network's computers.
  • Automakers are working on ways to conduct electronic commerce with suppliers over the public Internet, despite concerns about hacking and security.
  • The network connects 250 suppliers to the automakers' computers and is expanding into other industries tied to the automakers.
  • The Science Applications International Corporation, owner of the Automotive Network Exchange, is a company based in San Diego with 36,000 employees and $4.7 billion in revenue last year.

Statistics:

  • 250 suppliers are already connected to the Automotive Network Exchange.
  • 200 more suppliers have applied to join the data network.
  • The network is expected to expand to other industries, including electronics manufacturers.
  • The Science Applications International Corporation generates $4.7 billion in revenue annually.
  • The Automotive Network Exchange connects the automakers' computers to those of 250 suppliers.

Sources:

  • The New York Times
  • Science Applications International Corporation