Fleet News

Car firms fail to agree over procurement

May 2000: GLOBAL car makers have failed to reach agreement on a common on-line procurement system.

Both Volkswagen and BMW have decided to create their own internet purchasing markets, rather than join the DaimlerChrysler/Ford/General Motors internet alliance.

VW is forming a strategic partnership with IBM, i2 Technologies and Ariba to build a global digital marketplace for parts, tools and even office equipment.

The company is understood to have spent DM100 billion (€51bn) last year on purchasing, and expects to save up to 50% on process costs, according to Francisco Javier Garcia Sanz, VW board member for procurement.

BMW is streamlining its worldwide procurement operations by establishing a global business-to-business e-commerce platform. The company is also adopting the Ariba B2B intranet procurement system to 'aggregate our spend, consolidate our supplier base and improve the efficiency of our procurement process to significantly reduce our cost of doing business,' said Dr Horst-Henning Wolf, executive director of worldwide technical purchasing for the BMW Group.

But Renault and Nissan plan to join the DaimlerChrysler/Ford/General Motors internet alliance as an equity partner.

This alliance now brings together five manufacturers with direct purchasing power of $300 billion and the business potential for $100 billion.

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