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Major parts suppliers see little benefit in B2B exchanges

Most of the world's largest automotive suppliers have no plans to trade and exchange information on-line.

A survey of 57 major top tier automotive suppliers, with a combined turnover of more than £30 billion and 500,000-strong workforce, showed that nearly two-thirds have no formal strategy for trading using business-to-business exchanges.

More than half do not plan to join an exchange in the future.

Such opinions deal a severe blow to the reputation of Covisint, the global, independent e-business exchange, developed by DaimlerChrysler, Ford, General Motors, Nissan and Renault,.

In the research, conducted by Cap Gemini Ernst & Young, the respondents said that while joining Covisint would help reduce transaction costs, ease the process of getting new customers and provide better access to information, most thought the cost of implementation was too high to join. 52% believe suppliers do not have the funds to invest properly in trading via an internet exchange.

A such many supplier had adopted a 'wait and see' approach.

Gary Turner, executive consultant in Cap Gemini Ernst & Young's UK automotive practice, said: “The 'wait and see' approach will fail to maximise the full potential benefit of participating in B2B exchanges. However, whichever approach is chosen, it is vital for suppliers to develop a strategy to support it – whether it is an aggressive strategy for maximising the value of an exchange, to take the lead and leverage the benefits – or a strategy for defending an external position and minimising the impact and disruption of trading outside the exchange.”

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