The German association of carmakers and suppliers will investigate alleged abuses in some of the industry's early online reverse auctions.
Some German suppliers have criticized procedures at auctions held by unnamed automakers.
'We have received reports from some suppliers who believed the auctions were not handled properly,' said VDA spokesman Peter Tomsen.
In the online auctions, suppliers bid on automakers' component contracts, responding to prices posted on the web anonymously by other bidders.
Tomsen said some suppliers believed that carmakers entered false bids to drive down prices -a practice known as 'bidding from the wall.'
'They had the impression that the OEM which organized the auction had been bidding against others just to enforce the lowest price,' said Tomsen. 'We will investigate this and advise OEMs to make auctions fully transparent.'
Tomsen declined to say what carmakers had conducted the auctions or identify the suppliers who complained. But he said the auctions were not held by Volkswagen's new online trading exchange, nor Covisint, the e-purchasing network formed by General Motors, Ford, DaimlerChrysler and Renault.
'We will send a letter to all OEM's asking them to take serious notice of such practices,' he said.
Meanwhile, some industry consultants say carmakers are overlooking complications associated with online trade exchanges.
The consultants say the initiatives such as Covisint and VW's could lead to job losses and take longer than expected to implement.
And they say the financial benefits are unlikely to be as great as some carmakers have suggested.
One of the problems is the number of online purchasing platforms being created.
'Six months ago, some people wanted to make us think there would be just a single business-to-business e-marketplace for the industry,' said Frank Lerchenmueller, vice president of IBM e-business Strategic Industrial Sector in Stuttgart.
'But today's reality is that there are already several OEM e-markets, plus some other global initiatives set up by suppliers. We expected this to happen although most people weren't prepared for such a multimarket situation to emerge.'
'Suppliers must be able to connect with all of their customers, and their systems have to be flexible.'
After VW and Covisint, Toyota plans to open its own e-market. Last week, BMW launched its own e-business venture, nexolab.
Bosch will also go online with its SupplyOn trade exchange before the end of the year, as will Rubbernet, an initiative of Michelin, Goodyear, Bridgestone, Continental, Pirelli and Cooper.
Lerchenmueller said carmakers want to have their online exchanges operational as fast as possible, adding: 'The real thing is how fast other players in the supply industry are able to adapt and implement.'
Managers used to being able to negotiate overnight will have to make quicker decisions, said Niko Zoellner, vice president of A.T. Kearney in Dusseldorf. A.T. Kearney, like IBM, is a partner in VW's online trade exchange.
'When an Internet auction takes only three to four hours, the same people have to decide immediately - otherwise the time advantages are lost,' he said.
'This means that different and new disciplines are needed, with higher skills and more responsibilities.'
Zoellner added: 'New disciplines may also include decentralized decision making, and allowing several new people access to the e-tool. So training of staff will be essential. In fact, changing the human aspects may be more difficult to fulfill than implementing the e-business technology.'
Zoellner said jobs would be lost because most savings are a result of fewer people being needed in all processes.
'If savings per car are DM1,000 (E506.5), that means annual savings of DM5 billion are possible when output is 5 million cars - such as in Germany,' he said. 'You can figure out that massive job losses are evident. I wonder if everybody in the industry, as well as politicians, are aware of that.'
But Lerchenmueller said job losses from direct labor savings would be partly offset by new jobs in other areas, such as logistics.
Zoellner said logistical complications would arise when goods have to be delivered more often and in smaller quantities.
'The industry must really start thinking about such effects, otherwise our society will become paralyzed following new developments,' he said.
'Time saving through online purchasing with catalogs and auctions is obvious,' Zoellner said. 'But the further e-market trading develops, the more complicated it becomes.'