Toyota Motor Corp and Honda Motor
Co may enter a new Internet parts exchange involving major U.S.
automakers, but analysts expect their role to be limited to
purchasing raw materials and simple parts.
On Friday, Detroit's Big Three abandoned plans to create
rival online parts procurement networks and said they would
instead build a single Internet marketplace.
The result will be the world's largest Net market. The Big
Three alone plan to spend a combined $240 billion on supplies a
year, cutting costs and generating billions of dollars in
In addition to General Motors Corp, Ford Motor Co and
DaimlerChrysler AG, it would be open to other automakers and
their respective suppliers and dealers.
GM's Japanese partners Isuzu Motor Co, Subaru maker Fuji
Heavy Industries, Suzuki Motor Corp and Ford unit Mazda Motor
Corp are expected to participate.
Renault SA and its Japanese partner Nissan Motor Co have
said they will join. Mitsubishi Motors Corp is also considering
But spokeswomen for Toyota and Honda, both of which have
been looking at a General Motors proposed exchange but had been
sceptical about the merits of a common market, said Friday's
announcement had not precipitated any change in company policy.
A Wall Street Journal report on Monday, however, quoted an
unidentified Toyota official as saying the automaker would
likely join and invest in the venture as long it guarantees
freedom in how Toyota uses the system and erects credible fire
walls to protect corporate secrets.
Analysts say Japan's two largest automakers, with far leaner
inventory and production systems than U.S. makers, are likely to
be very choosy about what they order on the site.
"There could be merits in raw materials procurement," said
Noriyuki Matsushima, auto analyst at Nikko Salomon Smith Barney.
"But Toyota and Honda develop many parts together with
their suppliers and it's hard to imagine they will go through
the site to get these when information might be exposed," he
And both would have little reason to make themselves
dependant on the exchange when they had their own systems.
Toyota which developed the just-in-time parts supply
system that revolutionised automaking in the 1980s, has its own
Intranet system that links it with 1,250 parts companies.
U.S. and Japanese automakers also have very different parts
philosophies. Officials at Toyota and Honda have often
questioned the trend towards universally available common parts
a trend they see as taking the competition out of carmaking.
Many Japan-based analysts also say they are not yet
convinced that the exchange would work in practice.
Suppliers could reduce costs during the first year of the
exchange's operation, tempting assemblers to bulk-buy from only
one supplier but the assembler could easily be at the mercy of
price hikes by that supplier the next year, they said.
Toyota however is aiming to put the auto replacement parts
market online. Its U.S. sales arm announced last week it would
work with software maker i2 Technologies to put the $100 billion
U.S. market on the Internet.