Renault lukewarm on benefits of Covisint exchange

PARIS, July 2 Reuters reports that Renault SA said it has seen some benefits from online automobile industry exchange Covisint LLC, but some key aspects of the system have failed even to get off the ground, the French carmaker's chairman said on Tuesday.

"One of the promises made about Covisint was that there would be online, real-time communication with suppliers," Renault Chairman Louis Schweitzer told journalists after a presentation in Douai, northern France.

"This has not materialized yet. Maybe it will one day, but it hasn't yet ... There are still some confidentiality issues to address."

Renault and its Japanese alliance partner Nissan Motor Co. Ltd. (Tokyo:7201.T - News) joined Covisint after it was set up. It has never disclosed the stake it took in the venture, though Schweitzer said it was "small."

Covisint, formed by the Big Three U.S. automakers at the height of the e-commerce boom, on Friday said its Chief Executive Kevin English had resigned and it was laying off a quarter of its 400 employees.

The company's aim was to help automakers such as Renault save billions of dollars by shifting their purchasing to online auctions and linking their supply chains.

But automotive suppliers have been slow to warm to the system, fearing their profits could be hit. Manufacturers have shied away from integrating their databases fully into Covisint for fear of security breaches.

Schweitzer said that the savings gleaned from online bidding sessions with suppliers were "not in the billions, though the savings are there."