Although Covisint has gone live, it has not become the only option for automotive suppliers.
Some Tier 1 companies - including a few that have pledged their support to Covisint - are using other online exchanges for auctions and other services.
FreeMarkets' business-to-business eMarketplace, for example, has 14 automotive customers, including one or two automakers.
Visteon Corp. has sourced contracts worth more than $390 million through eMarketplace this year. Other users include Delphi Automotive Systems Corp., Dana Corp., Eaton Corp., SPX Corp. and Pilkington plc.
This is business Covisint hopes to capture once it is fully functional and has a full line of products for suppliers and automakers.
'There certainly is room for competition,' said Alice Miles, who leads customer development at Covisint. 'FreeMarkets has been around for a while. We would expect that to continue.'
But Covisint is working now with only its first release of products - four online tools, including buyer and seller auctions and a visualization tool for three-dimensional product development.
As Covisint develops more tools for its users, its value to customers will increase, Miles said. She expects more tools to be added during the next year.
Thirty-two suppliers, both large and small, have helped Covisint in its developmental stages, Miles said. For example, these suppliers review products that Covisint is considering offering.
FreeMarkets had only two automotive customers in January. Covisint's development has not hurt the company's auction business with automotive suppliers, said David Becker, president and chief operating officer of FreeMarkets, based in Pittsburgh, USA.
'People are systematically signing up with us, and are paying homage to Covisint and other exchanges,' Becker said. 'We're simply going about our business - making our product better, faster and cheaper than anyone else out there.'
Ford Motor Co., General Motors, DaimlerChrysler, Nissan Motor Co. and Renault SA are founding partners of Covisint and are expected to be the primary automakers using the exchange. Suppliers who do business with those automakers will use Covisint as well.
But Covisint also wants automotive suppliers to use their own branded sites on Covisint, a portal through which they can connect with their own suppliers.
Covisint went live October 3, but has seen only limited action, said Miles.
Becker looks forward to the competition Covisint will provide FreeMarkets. At the moment, he sees no competition.
'Covisint has painted an incredible vision, and to date, at least in our opinion, it has just been a vision,' Becker said. 'We don't see them in the marketplace taking customers away from us. That's not our big competitive challenge right now in automotive.'
More than 7,000 suppliers from over 55 countries have participated in the Freemarkets business-to-business eMarket-place. The company also operates FreeMarkets Asset Exchange for surplus assets and inventory.
As Covisint ramps up operations, it still has no permanent CEO. Miles said there are fewer than five candidates for the position, but no decision is imminent.
'They are a very diverse group,' she said.
Covisint still is not a legal entity, so the employees now working for Covisint are still on loan from the automakers and technology providers, Miles said.
'But we are very close,' she said. The operation may be incorporated by the end of this year, or in the first quarter of 2001, she said.