General Motors is intensifying its talks with Toyota Motor to involve the Japanese automaker in TradeXchange and is open to offering it a stake in the new business-to-business e-commerce site, a senior GM official said on Monday.
GM will also begin a pilot program this year at plants in the United States, Europe and Latin America to slash its vehicle order-to-delivery time, the first steps in a plan to halve its worldwide vehicle inventories to $20 billion from $40 billion in the next three years, said Mark Hogan, president of e-GM, GM`s e-commerce business unit.
Since GM announced its TradeXchange venture in November, it has held active discussions with several automakers, including Toyota and Honda Motor Co., to create an major Internet supplier to the automotive industry.
"We are going to have discussions in another 10 days (with Toyota). We are moving it to the next level," Hogan said. "It started at my level and now we`re getting the working guys talking together, so the overhead`s out of the way and the real decision makers are involved."
GM expects its suppliers to use TradeXchange and would charge them a small fee for every transaction they make, making it a revenue generator in addition to a system with great potential to cut costs.
When asked if GM would give up a piece of TradeXchange in order to bring in Toyota, Japan`s leading automaker, Hogan said; "We are open from a business model standpoint to consider that."
Hogan said discussions with other automakers about TradeXchange, which will become fully operational in the first quarter, are continuing, and some are more advanced than others. Ford Motor is also racing to sign up automakers for its own AutoXchange e-commerce Web site.
In addition, Hogan said a couple US vehicle assembly plants would begin a pilot program this year to cut the time needed to deliver a vehicle to a dealership after an order is placed with the manufacturer to about 10 days from an average of 30 to 40 days. The Latin American and European plants will cut their order-to-delivery (OTD) time at a different rate.
"I do not think we can afford to wait too long," he said about the OTD time. "My own personal timetable, I think it`s got to get it done across the company in three years. It is a huge undertaking."
Cutting the time would save a huge amount of money in financing the vehicle, storage and upkeep, he said.
Ron Zarrella, head of GM`s North American automotive operations, told reporters earlier this month that the automaker would invest from $250 to $500 million over the next few years in computer systems to slash the delivery time. If regional distribution centres are needed, that cost could rise to $1 billion, he said.
Key to cutting the time down will be the outbound logistics rather than speeding up the delivery of parts to the assembly plants, Hogan said.
"It is ambitious," he said. "It could end up creating some regional distribution centres."
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