Volkswagen U-turn puts it on road to Covisint

Volkswagen has started trading on its private B2B hub and could be on its way to striking a deal with Covisint - the industry exchange it has long refused to join.

Volkswagen officials said this week that the exchange, VWsupplygroup.com, is now handling almost all of the company's procurement needs, and it expects transactions over the exchange to total as much as $56m over the next 12 months.

The carmaker said 5,500 suppliers had already used the site, conducting over 500,000 transactions, and it expects more to sign up.

Volkswagen, along with fellow German car maker BMW, has always refused to join auto industry exchange Covisint, preferring to operate alone.

But earlier this month, Lars Olrik, European MD of Covisint, told silicon.com that the industry marketplace is close to striking a deal with BMW and is in early stages of talks with Volkswagen.

While he did not disclose details of the negotiations, Olrik is confident a deal could be inked by Christmas.

He added that despite the multi-million dollar investment Volkswagen could find it difficult to attract new suppliers to its exchange if it did not work with Covisint.

Volkswagen was not available today to comment on the matter, and has not disclosed the cost behind its marketplace.

But Ford, one of the three founding members of Covisint, said earlier this year that the $70m it saved on indirect procurement, more than covered its initial share of investment in the exchange.