VW Gets Online Auction Bug

Volkswagen taps eBreviate for Internet auction solution

Walnut Creek, CA  Volkswagen, manufacturer of cute German cars, will use online auction software from U.S.-based eBreviate under a multi-year contract that will see VW install a self-service auction application within its firewall, according to an announcement today from the software company.

The contract covers technology, maintenance and installation of eBreviate's auction software, and encompasses all of VW's operating units and brands, including VW, Audi, Seat, Skoda, VW de Mexico and VW Brazil. Auctions will be conducted at VW sites in Brazil, Czechoslovakia, Germany, Mexico and Spain, and will be supported in multiple languages and currencies.

"eBreviate's technology and approach are best suited for our needs to drive broad adoption of online auctions across the VW organization," said Meike-Uta Hansen, head of auctions for the B2B project at Volkswagen.

The new agreement extends VW's use of the eBreviate software beyond the 270 auctions that the manufacturer has completed to date using the application. eBreivate says that in the last eight months VW has negotiated more than $5.2 billion of direct and indirect materials and services using the software, with materials auctioned to date ranging from hubcaps and water pumps to aluminum and fax machines.

VW ran a pilot with several auctions early in 2000 as part of a strategic sourcing project run by A.T. Kearney, which shares parent company EDS with eBreviate. eBreviate began directly working with VW in June 2000, and in September 2000 VW decided to challenge itself to see how many auctions the company could do in the fourth quarter of 2000, according to Sarah Pfaff, co-founder and executive vice president of sales, marketing and strategy at eBreviate. Ultimate, VW ran 30 events by year's end.

After reviewing the results of the pilot, VW "got the auction bug," Pfaff said. The manufacturer subsequently has run 240 auctions.

VW's "Big Bang" approach is atypical of how eBreviate's customers have gone about implementations, Pfaff says, with most companies preferring to get their toes wet with a handful of auctions before evaluating the return on the investment. "Other manufacturers and non-manufacturers can learn [from VW's experience], because what Volkswagen has proven is that when you jump in big, you end up with much more rapid adoption across your company, and that drives the benefits to your bottom line," Pfaff asserted.

eBreviate has worked with other players in the auto industry and has counted Bosch Automotive, Dura Automotive and Visteon among its customers, although the VW Group represents eBreviate's largest automotive customer at present.

VW began its auctions project using eBreviate's full-service model but subsequently elected to take the process in house using the self-service application.