German car maker Volkswagen AG on Wednesday rejected overtures to join U.S. rivals in an online purchasing network and invited others to participate in its Internet marketplace, in a move set to divide the industry.
Europe`s biggest car maker, which had been invited to join a Web alliance with General Motors Corp., Ford Motor Co. and DaimlerChrysler AG, said it would set up its own network rather than team up with its U.S. competitors.
VW said it had agreed a technology partnership with IBM Corp., i2 Technologies Inc. and Ariba Inc. to set up an independent digital marketplace for the acquisition of parts, auto manufacturing equipment and office supplies.
VW, which spent around 100 billion marks ($48.90 billion) on purchasing last year, said it hoped to eventually link all of its 6,000 suppliers to the network in a bid to cut costs. The platform is to start operating in the first half of next year.
VW did not disclose if it had been in talks to woo others to join its network but said it had no plans to set up a separate company to bundle common online purchasing. Rather it wanted to create a new online purchasing standard for the industry.
"Our market place is open to all,`` VW management board member Jens Neumann said in a statement. VW did not say how much it expects to save as a result of the initiative, but payments to suppliers account for two-thirds of the cost of a vehicle.
Rival online buying blocs
VW`s decision to go it alone was widely expected after it had expressed reservations about joining forces with rivals across the Atlantic because of concerns about confidentiality.
Ford, GM and DaimlerChrysler announced in February they would pool their $240 billion a year procurement needs on a single network in a bid to drive down costs by squeezing suppliers for cheaper parts and equipment.
"Volkswagen will therefore not participate in the Internet alliance agreed several weeks ago by the three American auto companies,`` VW said after outlining its independent plan. VW`s own initiative could create an online purchasing bloc to rival the one created by the `Big Three` U.S. car makers. Ford and GM are Detroit-based. U.S-German group DaimlerChrysler is based in Stuttgart, Germany.
"It looks like it is possible that there will be at least two separate networks, which I think is a shame because I think suppliers would have preferred just one,`` UK-based European Auto Research analyst Jonathan Storey said.
While VW has forged ahead with the creation of its own online purchasing network, a number of leading Asian and European companies are still waiting in the wings to assess the success of common online purchasing ventures pioneered by rivals.
France`s PSA Peugeot Citroen and Germany`s BMW AG have said joining a common online purchasing initiative would be premature.
But France`s Renault SA and its Japanese partner Nissan Motor Co have already said they will join the U.S.-led initiative. Toyota Motor Co is also expected to team up with Ford, GM and DaimlerChrysler.
But VW -- which makes VW, Audi, Seat, Skoda and Bentley cars -- remained undaunted and said it expected to create a European benchmark for online purchasing with its own initiative.
Share