PARIS - Louis Schweitzer says Covisint could help Renault save up to $300 per vehicle. But the Renault chairman says reports of much higher savings from the online purchasing exchange are exaggerated.
'Fantastic figures, savings of $1,000 per car or so, came out,' said Schweitzer. 'The savings are difficult to estimate. But we think that they could reach $200 to $300 per car for European carmakers.'
Still, Renault is enthusiastic about the exchange, which has won regulatory approval on both sides of the Atlantic and is ready to begin operations.
'We want all of our purchasing to go through Covisint,' said Jean-Baptiste Duzan, Renault vice president for purchasing. 'That is FF155 billion ($21.5 billion) for Nissan and FF116 billion ($16 billion) for Renault. It may be the first genuine example of a combined Renault-Nissan initiative.'
The savings form part of a new Renault cost saving plan. The plan runs from 2001 to 2003 and aims to reduce Renault's costs by about E3 billion.
Speaking at the Paris auto show, Schweitzer said, 'Covisint will make working with the supply chain easier.'
Duzan said Covisint's benefits go far beyond purchasing.
'They will come more from supply chain management and product development than from purchasing operations alone,' said Duzan. 'They include inventory reduction, better information regarding quality control, a quicker response to customers demand and less paper.'
Covisint was formed in February by General Motors, Ford, and DaimlerChrysler. Renault and Nissan later joined. The exchange was cleared for operations recently when the German Bundeskartellamt completed its investigation. Earlier, the exchange was approved by the US Federal Trade Commission.
Renault executives are expected to begin using the new exchange later this month.
PSA/Peugeot-Citroen is taking a different approach to e-procurement.
'We will participate in marketplaces - we'll make a decision in the coming months,' said PSA Chairman Jean-Martin Folz at the Paris show.
Meanwhile, PSA will launch a supplier portal that will serve as an information exchange, not an e-marketplace. The portal will begin operating early next year. It will be used to share information about parts prices, quality control and logistics.
The portal will also give suppliers access to PSA's digital engineering platform, called Ingenum.
But Folz believes that buying and selling of components online can bring substantial benefits, too.
'There are advantages for procurement logistics and invoicing processes,' he said. 'We believe that marketplaces can provide a great pay-off but that PSA does not need to be a leader in creating a marketplace.'
Analysts believe that could mean PSA will join Covisint or one of the other proprietary exchanges being formed.
Duzan said he does not expect many other e-marketplaces to emerge.
'The expenses in information technology will be considerable,' he said. 'For that reason I don't see many of these marketplaces being launched.'