The number of eMarketplaces in the automotive sector is growing.
The potential of B2B eMarketplaces is unquestionable, although currently they are still in the embryonic stage. In the auto sector, the first deal in the biggest, most publicized B2B exchange Covisint has just been signed. But over 40 B2B eMarketplaces already exist. These range from the leviathan Covisint to the specialized iSalvage, that trades in recycled parts.
The whole automotive industry will benefit immensely from eMarketplaces. The savings from transactional efficiencies alone should outweigh the investment incurred. However, the industry must plan for the future if it is to maximize this economic gain. Many companies are updating internal infrastructure for eCommerce; they will need to update it further to conduct business through eMarketplaces.
The future will clearly be dominated by the likes of Covisint at the top of the value chain and smaller specialized exchanges, but the extent of cost savings, and which exchanges are successful, will be determined by whether automotive players are hindered by technical incompatibility. If companies have to use various platforms, then front and back office systems will have to be integrated. With a multiplicity of exchanges, this will cause problems in the medium term. And in the short term, uncertainty of which eMarketplaces will be successful and useful is hindering standardization of system architecture. Unless addressed now, today’s developments will become problem legacies for tomorrow.
