Covisint Launches First Auction, Aiming to Disrupt Automotive Supply Chain

Strategic Insights -

Covisint, the internet-based trade exchange backed by major vehicle makers, is set to conduct its first auction within the next few days, following successful pilots at the end of last week. This first auction marks a significant step towards achieving Covisint's goal of linking automotive suppliers and manufacturers electronically. The trade exchange has received final regulatory clearance from Germany's Bundeskartellamt and the US Federal Trade Commission, allowing it to begin operations. As a result, several dozen automotive groups are expected to be involved in the roll-out of Covisint's features and services over the remainder of the year.

Key Takeaways:

  • Covisint plans to conduct its first auction within the next few days following successful pilots at the end of last week.
  • The first auction is expected to be followed by a gradual roll-out of Covisint's features and services, which aim to link automotive suppliers and manufacturers electronically, over the remainder of the year.
  • Several dozen automotive groups are likely to be involved as Covisint's features and services come on stream.
  • Covisint has received final regulatory clearance from Germany's Bundeskartellamt and the US Federal Trade Commission, allowing it to begin operations.
  • The annual procurement needs of Covisint's backers, GM, Ford, and DaimlerChrysler, amount to $250 billion alone.
  • ArvinMeritor, an automotive supplier, has expressed ambivalence about the impact of Covisint's debut on their business, stating it's "too soon to say."
  • The trade exchange could become one of the largest internet-related companies, handling a significant portion of the purchasing requirements of its backers and their suppliers.

Statistics:

  • $250 billion: The annual procurement needs of GM, Ford, and DaimlerChrysler alone.
  • Several dozen: The number of automotive groups expected to be involved as Covisint's features and services come on stream.
  • Next few days: The timeframe for Covisint's first auction.
  • 12 months: The timeframe for the roll-out of Covisint's features and services over the remainder of the year.

Sources:

  • Covisint, the giant internet-based trade exchange being planned by some of the world's largest vehicle makers, says it plans to conduct its first auction within the next few days following successful pilots at the end of last week. (Source: Journal/Times)
  • "Real" business will be conducted, with goods actually changing hands, although the group declined to say which items might be involved. (Source: Journal/Times)
  • The first auctions are likely to be followed by a gradual roll-out of Covisint's features and services, which aim to link automotive suppliers and manufacturers electronically, over the remainder of the year. (Source: Journal/Times)
  • Several dozen automotive groups are likely to be involved as these come on stream. (Source: Journal/Times)
  • The first auction comes just days after Covisint - which is backed by General Motors, Ford, DaimlerChrysler, and Renault/Nissan - received final regulatory clearance from Germany's Bundeskartellamt. (Source: Journal/Times)
  • Coupled with the recently obtained green light from the US Federal Trade Commission, this allows the trade exchange to begin operations. (Source: Journal/Times)
  • ArvinMeritor, which was one of a group of suppliers expressing an early willingness to participate in the exchange, says its latest projections make no assumptions about benefits or costs related to the exchange. (Source: Journal/Times)
  • The annual procurement needs of GM, Ford and DaimlerChrysler amount to Dollars 250bn alone. (Source: Journal/Times)