MUNICH - BMW has become the latest automaker to bypass Covisint and set up its own Internet purchasing exchange.
BMW and information technology subsidiary Softlab last week founded their own e-business company, nexolab.
Nexolab will bundle together the e-business activities of the entire BMW group. In the area of electronic procurement, it will compete with rival e-business platform Covisint.
Covisint was formed in February by General Motors, Ford and DaimlerChrysler. Renault and Nissan later joined.
'BMW has decided not be part of Covisint,' said Robert Bauer, BMW's chief procurement and information technology strategist. 'But as Covisint is a free-trade e-marketplace, we might use this platform occasionally - if we can benefit from doing so. But we generally want to remain flexible and free to act in all marketplaces worldwide.'
Bauer added: 'An economic partnership in one marketplace [Covisint] would force the procurement department to order and buy everything through this channel, to create as much 1/8traffic' as possible.
'This cannot be the job of the procurement department [to create profit for Covisint].'
Volkswagen has also set up its own electronic procurement network. VW linked with i2 Technologies, Ariba and IBM, and took under six months to build and begin operating its exchange, Electronic Supplier Network.
Purchasing executives at BMW and VW claim Covisint is not neutral enough and is too dependent on the interests of its founders, GM, Ford and D/C.
At the Automotive News Europe Congress in Montreux, Switzerland, in June, BMW Senior Vice President of Purchasing Wilhelm Becker said:
'Covisint is too controlled by our friends in America. We don't want our secrets in the hands of competitors.'
Suppliers have also criticized Covisint as just another tool to drive down the cost of components. They worry about transaction fees and the profit motive of Covisint. Some suppliers also fear Covisint might compromise their proprietary technologies.
A spokesman for German supplier Mannesmann VDO said: 'We will take part in this marketplace, but only as an electronic sales channel for our products. We will definitely not use it as a procurement platform for our supply chain.'
A German supplier executive who did not wish to be named said manufacturers could use Covisint to jump the supply chain and deal direct with sub-suppliers.
The profit orientation of Covisint was also a reason why VW chose to create its own platform, which does not charge usage fees. VW says it will have held 100 e-business-auctions by the end of this year.
'Ford, GM and DaimlerChrysler have created Covisint to float that company and profit from the hype about the technology stock,' said Jens Neumann, VW board member responsible for group strategy and e-commerce.
'If we had decided to join Covisint, we would only have been a junior partner,' he said. 'This is not an adequate role for Volkswagen.'