Auto Service World
News   January 12, 2004   by Auto Service World

Revolutionary On-Line OEM Parts Auction Shutting Down

Covisint, which was supposed to transform the way that the OEM’s purchased parts for their automotive manufacturing operations, is all but gone.
According to industry reports, the company sold its online auction service and has shut down its electronic parts catalogue. The remaining business is primarily a new electronic data transmission service for manufacturers.
Now the automakers that own Covisint want to sell their equity stake, said a senior executive whose company is one of the owners.
“Covisint won’t remain under the ownership of big manufacturers,” he said. The automakers have found that developing products and reaching agreements is difficult with multiple investors, the source said.
Covisint has insisted publicly that it can survive on the strength of its online portal product and data transmission service, which seeks to provide a common format that streamlines the exchange of electronic documents between suppliers and automakers.
The company neither confirms nor denies that it is for sale.
“Any comments about the future of Covisint are speculative at best,” said Paul Manns, the company’s director of marketing. Manns said Covisint doubled the number of users last year, launched the electronic data transmission service and raised money by selling its online auction service. According to Manns, Covisint is profitable.
Covisint’s owners include General Motors, Ford Motor Co., DaimlerChrysler, Renault and Nissan.
When the company was formed nearly four years ago, its backers hoped to create an online trade exchange for suppliers and automakers.
At the time, Covisint’s founders hoped to generate huge profits by launching an initial public offering. Some industry analysts even predicted the company would become the world’s largest online enterprise.
Those hopes vanished after the dot-com bubble burst.
Covisint failed to become the auto industry’s primary online link, and the company has struggled to make money.
Covisint’s owners have poured more than $500 million into the venture, according to technology research firm AMR Research of Boston. It’s questionable whether Covisint’s owners will ever recoup their initial investment.