Car giants create online marketplace

Three of the world's biggest car manufacturers, DaimlerChrysler, Ford Motor Company and General Motors (GM) have joined forces to develop an online marketplace where dealers, partners and suppliers can buy and sell parts.

The global business, to be managed as a separate company and owned equally by the motor giants, will be floated as soon as is viable.

Two of the three companies already have a similar system in place. GM's TradeXchange is a site for purchasing car parts via catalogues and auctions available to all its members; while Ford's Auto-Xchange system allows the whole industry to trade in parts and offers real-time supply chain management. The sites are administered by Commerce One and Oracle Corporation respectively.

Tony Clifford-Winters, ecommerce advisor at research company Sitdl, said: "There could be major hurdles to integrating the two systems and it could cost millions of dollars."

He advocated XML (eXtensible Markup Language) technology as a possible way around the integration difficulties. "XML is non-specific to any vendor and would be the wisest choice," he said.

Clifford-Winters said the business-to-business concept for this industry is a feature of how the Web is developing. "The presence of easy networking, Internet Protocol (IP), will enhance the globalization of industries but the danger will be that the reduced competition will be at the customer's expense."

David Barnas, a spokesman for GM, said the vendor branding will disappear as the sites are integrated into the as yet unnamed exchange. "Oracle and Commerce One will be very, very key players in this project and both will be providing the technology for it," he said.

Barnas claims the exchange will increase rather than decrease competition, with everyone having the same access to the same product information. "We are still the fierce competitors and will continue to be once this exchange in place," he added.