LONDON - Tier 1 suppliers such as Delphi Automotive, the world's largest parts maker, are busy working out how to respond to the new online purchasing networks being built by their customers.
Some suppliers, such as Dana Corp. in the United States, are developing their own e-commerce Web sites, which allow business partners to share data, not merely exchange e-mails or files.
Jose Maria Alapont, president of Delphi Europe, said his company is studying the alternatives. But his main concern is that the industry should quickly standardize whatever systems it uses.
Alapont said the vast new data interchanges, such as Ford's AutoXchange and GM's TradeXchange, will transform the industry. The Web sites, he said, will teach suppliers what European car buyers really want, not what dealers are able to sell.
Last month, Delphi set up a full-time team in Europe to study e-commerce opportunities.
'Some car manufacturers have started moving formally into business-to-business relations,' said Alapont. 'GM has announced a system, Ford another, and the European car manufacturers are currently discussing the same possibilities.
Seeking standards
'We have still not defined which type of process we are going to use,' he said. 'But we would very much like the industry to standardize in the best possible way, and not end up with another CAD (Computer Aided Design) type of situation when later you need to have translators between one another.'
On the Ford and GM purchasing sites, buyers and sellers will come together online to do business. Executives say they expect the new sites to cut procurement costs dramatically.
Last month, Ford's AutoXchange conducted its first online auction, for $78 million worth of tires.
Alapont said Delphi is anxious to link not only with car manufacturers but also with its own Tier 2 and Tier 3 suppliers.
'We are evaluating the different alternatives, and trying to find the best and most efficient solution to fulfill the needs of our different customers,' he said. 'We need to find a solution that enables the best standardization. But if we need to work with a particular customer we will use its system.'
Valuable data
Alapont said the new extended enterprises will yield valuable information for suppliers.
'When a customer goes to a dealer, he usually has a certain thing in mind, but he ends up buying something different,' he said. 'What is reported from the car manufacturer to the supplier is what we believe the industry wants. But that is only what the dealer has managed to sell to a customer.'
The new online networks, which bind together the manufacturing and sales processes, will allow suppliers to see for themselves what customers are specifying, said Alapont.
'Then, when we go to the real customer, we understand what he wants in the car, what sort of value for money he wants, what sort of systems he's prepared to pay for, and which are the ones that really fulfil his expectations. You then have the real voice of the customer, and not just a noise in the system that comes to the car manufacturer and is then translated to us.'
The growth of e-commerce is also a major reason Delphi is pushing hard to increase its aftermarket business in Europe.
'With the Internet, the aftermarket is going to be the fastest-moving part of the car industry,' said Alapont.
Collision course
But pushing for more aftermarket business may put Delphi and others on a collision course with its customers. Europe's aftermarket - worth 100 billion euros, or about $96 billion - is dominated by vehicle manufacturers who repackage components and parts from suppliers under their own brands for sale to dealers. Suppliers such as Delphi want a bigger piece of this market, but are constrained by the European Union block exemption rule that allows carmakers to run exclusive sales networks. Under the rule, which expires in September 2002, only carmakers can supply parts to dealers.
Automakers wants to keep the exemption, but CLEPA, the European suppliers' association, has said it will not support carmakers.
'The block exemption is an issue that needs to be regarded by the industry with a lot of care and sensitivity,' said Alapont. 'It could limit us in certain manners - specifically the aftermarket. We need to keep progressing, the industry talking with the governments, to make a rational decision.'
