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eCommerce=Power Shift in Auto Industry

13 April 2000

Andersen Consulting: eCommerce Creates Power Shift in Auto Industry

    DETROIT, April 12 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 advantage."
    The Andersen Consulting Automotive, Industrial and Transportation (AIT)
group partners with the world's largest automotive OEMs, suppliers and
industrial equipment manufacturers to deliver value and provide financial
management and business solutions.  The company links people, processes and
technologies to strategies through its expertise in the areas of mergers and
acquisitions, product differentiation, customer relationship management,
channel management and eCommerce.  Andersen Consulting is an $8.3 billion
global management and technology consulting organization whose mission is to
help its clients create their future.  The company employs 65,000 people in 48
countries, including more than 4,000 AIT employees, and can be found on the
Internet at http://www.ac.com .