DETROIT (May 30, 2000) — Covisint, the planned online trade exchange among automakers, and other B2B initiatives could trim nearly $1,200 from the cost of building a vehicle in North America, says a new study by Deutsche Bank Alex. Brown and Roland Berger Strategy Consultants.
The potential savings is more realistic than other figures that have been bandied about during the recent hype over B2B savings in the automotive industry, said Rod Lache, vice president of Deutsche Bank Securities Inc., in New York.
Consumers will be the big winners, as 80 percent of the projected savings will transfer in the form of a 3.6 percent price reduction on a new vehicle, the study says.
"Everybody expects that most of the savings will end up with the consumers," said Michael Heidingsfelder, a Roland Berger partner in the Troy, Mich., office.
The study's key findings were released May 23 in Detroit. Deutsche Bank and Roland Berger plan a series of presentations for automotive executives, institutional investors and the media in June and July after they issue the final report. The findings in this study, "B2B E-commerce in the Automotive Industry — A Virtual Reality Check," were based on 150 interviews with automakers, suppliers and dealers worldwide.
Some 65-80 percent of the possible savings per vehicle will be from carmakers and Tier 1 suppliers. At nearly $1,200 per vehicle, North America represents the greatest potential for B2B savings based on an average transaction price of $24,500.
EDITOR'S NOTE: This story was originally published in the May 29, 2000, issue of Automotive News.