GXS Partners to Accelerate Supply Chain Automation in China's Automotive Sector

Joins China Entercom to launch B2B e-commerce hub for booming automotive industry

Joins China Entercom to launch B2B e-commerce hub for booming automotive industry

Gaithersburg, MD — March 14, 2006 — B2B connectivity specialist GXS is partnering with a Chinese communications company to create a new e-commerce solution to help accelerate supply chain automation in the Chinese automotive industry, the two companies announced recently.

Through its strategic partnership with China Enterprise Communications Limited (China Entercom), GXS will launch China e-Auto Hub, a B2B e-commerce solution for more than 5,000 companies in China's rapidly expanding automotive sector.

China e-Auto Hub will enable original equipment manufacturers (OEMs), parts and raw materials suppliers, automotive dealers, aftermarket retailers and third-party logistics providers in China's automotive community to quickly and easily exchange information related to design specifications, production planning and materials management in electronic format, according to GXS.

Turnkey Integration Solution

The solution provider said that new e-Auto Hub will provide China's automotive community with a secure and customized B2B e-commerce platform for the entire global trading partner community. Midsize and small suppliers will benefit from a turnkey B2B e-commerce solution that will provide seamless integration with business partners, helping to improve supplier-manufacturer relations and increase customer satisfaction, GXS said.

Through the China Entercom-GXS partnership, automotive manufacturers, as well as other local and international supply chain corporations, can connect to e-Auto Hub directly from their enterprise resource planning (ERP) systems or an integration broker. E-Auto Hub will offer transaction delivery of electronic documents, such as electronic orders, shipping notices and billing notes in industry standard formats, including ANSI EDI, EDIFACT, VDA and XML. Midsize and small businesses can connect to e-Auto Hub using Web-based forms, a desktop translator or other basic integration technology.

GXS and China Entercom will offer support services, including community ramping, implementation, technical and change management.

Winners Will Master Technologies

"The rapid growth of China's automotive sector is attracting substantial investments from OEMs and suppliers around the world," said Thilo Koslowski, vice president and lead automotive analyst at Gartner. "The long-term winners in China's automotive market will be those who master the use of technologies, such as B2B e-commerce, for competitive advantage. Multi-national corporations active in the China automotive market should consider leveraging an 'integration as a service' model to reduce time to market for supply chain integration."

The China e-Auto Hub will interoperate with GXS Trading Grid for international B2B transactions with trade partners outside of China. The Trading Grid is GXS' global B2B platform, enabling customers to exchange data with more than 40,000 businesses worldwide.

GXS and China Entercom said that the interoperability between China e-Auto Hub and Trading Grid will provide an advantage to China's growing import and export automotive trade. Chinese manufacturers of parts and vehicles for export will now be able to share information electronically with buyers around the world, including those in North America, Europe and Japan. Importers of raw materials and automotive parts will be able to receive information electronically from suppliers around the world including those in Brazil, Australia and Southeast Asia.

"As a global provider of B2B e-commerce and integration services, China Entercom has worked with GXS for years to set up China e-Auto Hub which was endorsed by National Development and Reform Commission (NDRC) of China as the first B2B e-commerce platform in the automotive sector," said Cheng Mingguang, vice president of China Entercom. "We are pleased to be working with GXS to bring the Chinese automotive industry to the next level of supply chain automation and globalization."

Sustaining Growth through Best Practices

GXS hosts one of the largest B2B networks in the world, supporting an automotive customer base that includes the top 25 global automotive OEMs, more than 70 percent of the tier-one suppliers and more than 6,000 tier-two suppliers.

"The automotive market in China is experiencing unprecedented growth, and is now is the second largest market in the world," said Bobby Patrick, chief marketing officer and senior vice president at GXS. "For automotive leaders to sustain these rapid growth rates within China and to continue their growing prominence in international markets, Chinese manufacturers will need to embrace best practices in supply chain management and B2B e-commerce."

Patrick said that the partnership with China Entercom would accelerate electronic trade between Chinese OEMs and their partners and boost their competitive position in the global automotive market.

Professor Chai Yue Ting, a member of the Advisory Committee for State Information and an expert of e-commence at the NDRC noted that automation of supply chain process is critical to improve Chinese companies' efficiency and to increase competitiveness when companies move towards globalization, one of the key government's initiatives to grow the local companies.

"We are pleased to see the strategic partnership between China Entercom and GXS to help local auto suppliers to streamline the supply chain that is in line with the government's policy, the professor said.

China e-Auto Hub is the first e-commerce project in the automotive industry which has been approved and funding by NDRC in 2005.