Volkswagen plans to cooperate with the Bosch-led SupplyOn e-marketplace, making VW's online exchange a tougher competitor for Covisint.
Sources say VW will announce a new Web portal to aid communications with suppliers, as well as the deal with SupplyOn, at a November 20 press conference in Wolfsburg.
The link with SupplyOn should lead to broader use of VW's Electronic Supplier Link (ESL) platform.
Bosch and four other major German suppliers founded Munich-based SupplyOn in mid-2000. The exchange has attracted another 15 associate members. The VW agreement is unlikely to affect SupplyOn's independent status, sources say.
VW strategy chief Jens Neumann and the company's head of purchasing, Francisco Javier Garcia Sanz, will announce the deal.
Volkswagen executives have said frequently that Covisint - which is part-owned by General Motors, Ford, DaimlerChrysler, Renault-Nissan and PSA/Peugeot-Citroen - is too focused on US needs.
VW plays down its rivalry with the US-headquartered online exchange. But a link with SupplyOn reinforces the competition.
Covisint is building its e-procurement and supply-chain expertise in Europe. But it has had limited success in capturing business below the OEM and Tier 1 supplier level.
ESL was developed with US software specialists Ariba, i2 Technologies and IBM. It has concentrated on e-procurement, which is now supported by eBreviate software. So far this year VW has conducted more than 500 auctions.
VW has also developed its so-called eCAP initiative, a capacity management function that enhances suppliers' visibility of demand and production forecasts.
Although a member of Covisint since early 2001, PSA has also recently established its own dedicated portal for suppliers, px2001.com. The portal enables real-time interchange with established suppliers.
SupplyOn has positioned itself between Tier 1 and lower-tier suppliers. But any link with VW is a significant strategic shift. The e-marketplace has been studying closer links with other OEM Web initiatives for some time. The agreement with VW is the first outcome of this strategy.