|DETROIT - Less obvious than the new sales, procurement, and
communication channels created by the infusion of eCommerce within the automotive industry
is the dramatic shift in power the Internet is rapidly creating. A major, and perhaps
underestimated effect of eCommerce on the auto industry is the transition of control from
the manufacturer to consumer.
According to Andersen Consulting's John Cunningham,
partner, Automotive, Industrial & Transportation, an "information
transparency" has been formed, opening access to once-unavailable information to
consumers and industry players. "The larger the amount of information in hand, the
better equipped consumers and industry players will be; information is power," said
Cunningham. "Power is pouring down at an accelerated rate from suppliers to
assemblers and from assemblers to consumers."
Cunningham adds that, utilizing the eCommerce catalyst, retailers are in a race to
deliver to consumers in a convenient format. The direct result is better customer
relationship management; the indirect result is the creation of better-informed consumers.
Ultimately, the power is harnessed by the consumer at the end of the chain.
As consumers benefit from the long-term infusion of eCommerce, will assembler and
supplier profits suffer? "One of the goals of eCommerce is to motivate suppliers to
drive costs down and, of course, continue the flow of cost-savings to the assembler,"
said Cunningham. "It is still necessary for assemblers and suppliers alike to
recognize and exploit the eCommerce trend: first-to-market definitely applies. It is
imperative that players enter the game early and strategically to create a competitive
(April 12, 2000)