Peugeot Joins Covisint

The world's sixth-largest automaker, PSA Peugeot Citro?n, has joined five other automakers as members of Covisint LLC. Jointly, the six account for more than 60% of auto production globally. Herve Guyot, VP of purchasing for Peugeot, which built 2.8 million autos last year in France, says Covisint's collaborative E-commerce, procurement, and supply-chain management offerings fit into Peugeot's other E-business plans.

AMR Research analyst Kevin Prouty says Peugeot will not use Covisint's design collaboration offering, the Virtual Project Workspace, but will build its own design collaboration exchange. Prouty says signing another automaker is a positive sign for the exchange, but a larger priority should be signing large suppliers. "I have spoken with suppliers who have called Covisint to get hooked up, but Covisint doesn't have the resources to handle getting all these suppliers on board," he says. "Covisint runs the risk of not being able to move as fast as suppliers want to move."

Covisint officials admit that with its small sales and marketing team, they've been unable to deal with more than a relatively small number of tier-one suppliers. Covisint's new chairman and CEO Kevin English says his first priority is signing more suppliers. Peter Weiss, executive VP of international operations for Covisint, says Peugeot's decision to become a Covisint member and DaimlerChrysler's recent $3 billion deal, which originated in Covisint's European operation, show that European carmakers and suppliers are rapidly adopting Covisint. "We are ready to handle their business," he says.

Peugeot takes an unspecified equity stake in Covisint, and joins DaimlerChrysler, Ford, General Motors, Nissan, and Renault. Peugeot also will join Covisint's European advisory council when it is established later this year. Financial details of the agreement are not being released. Prouty says Italian automaker Fiat, which is partly owned by General Motors Corp., will likely be the next automaker to join the exchange.