DETROIT - In a big new Internet push, Visteon Automotive Systems is selling aftermarket electronics equipment directly to online shoppers and is buying parts from suppliers at global Web-based auctions.
This week, Visteon will begin Web sales of aftermarket video systems, navigation devices and CD changers in the Chicago area.
Online shoppers can choose to have the electronics installed at Ford Motor Co. dealerships or at their homes. The program is expected to roll out nationally next month.
Visteon also might set up an aftermarket trading company to sell parts made by other companies on its consumer Web site. The Ford parts unit wants to use the Internet as its chief means of doubling its $1 billion aftermarket sales by 2002.
'There's really no limit to what you could put out there,' said Dave Bent, chief information officer for Visteon.
TAKING ON THE TITANS
Visteon's move into Web retailing brings it into direct competition with major aftermarket players in the mobile electronics industry such as Sony, Alpine and Pioneer. Visteon is a major supplier of original-equipment electronics for body hardware, audio, information systems and security.
The Dearborn, Mich., supplier wants a bigger piece of the market for automotive audio and information systems. That market is expected to grow 4 percent to $8.5 billion this year, according to the Consumer Electronics Manufacturers Association.
Suppliers also will see big changes wrought by eVisteon, the company's new electronic commerce strategy.
Last week, Visteon held its first Web-based parts auction, putting an estimated $150 million in supply contracts for printed circuit boards up for grabs.
Seventeen suppliers from Europe, North America, Latin America and Asia - some of them new to the auto industry - bid against each other for 90 minutes as Kim Marslender, a purchasing manager, orchestrated the auction from her computer screen.
Visteon pre-qualified the suppliers; company purchasers will make follow-up factory visits before Visteon signs its circuit board contracts later this year. Of the 17 suppliers that took part in the bidding, six had no previous business with Visteon.
The company declined to identify the bidders or discuss how much lower prices were driven by the online auction format. However, Marslender said the Web auction gives Visteon a much more accurate and timely sense of market prices.
Some current Visteon suppliers will lose business, she acknowledged.
'It's really going to change the way purchasing is run,' Marslender said. 'We're getting a little smarter, a little wiser.'
Using the Web to buy parts also elevates bidding activity to a global scale. Visteon was pleased to see Asian electronics companies in the auction because many are slashing prices on their products to cope with struggling economies in home markets.
Visteon plans to mount several more Web auctions for undisclosed commodity parts later this year. The company buys $8.5 billion in parts and supplies annually.
General Motors also has been buying parts via direct computer links to suppliers for about a year. Currently, GM makes 15 to 20 buys a month from suppliers with the help of a private online network. On Aug. 10, GM announced it would remake itself as an Internet company and expand vehicle communications with a new business unit called e-GM.
A total re-engineering of Visteon's computer infrastructure -designed with a possible spin-off from Ford in mind - has been in the works for more than a year.
Electronic commerce will help Visteon achieve its goal of expanding sales outside of Ford, Bent said.
Non-Ford customers currently account for 9 percent of Visteon' $18 billion in sales. Visteon wants to expand that business to at least 20 percent by 2002.
During the next three years, the eVisteon electronic commerce program will spread throughout the company's original-equipment business, a global network of 77 manufacturing plants and joint venture operations.
The company is using business management software from SAP AG, e-commerce tools from Sun Microsystems Inc. and Netscape browser software from America Online Inc.
Software for the printed circuit board auction was supplied by A.T. Kearney Inc.
Earlier this month, Visteon began moving business customers at its Carlite Automotive Glass unit to the Web. Aftermarket glass installers that once depended on the telephone and fax now may use a Web connection to order Visteon replacement windows from an online catalog.
By combining internal systems with Web connections to the marketplace, Bent said, Visteon is creating a new 'digital nervous system' that will be much more responsive to its customers and suppliers.