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,