B2B and Your New Car Purchase

Have you purchased a new car recently?  If so then chances are high that you were fewer than six degrees of separation from B2B e-Commerce technologies.   Review the questions below about the car buying process.  If you answered “Yes” to any of the questions, then you can read how B2B e-Commerce may have impacted your life.

Did you purchase a car manufactured in North America, Western Europe or Japan?

Automobile companies depend upon an extensive network of suppliers to provide most of the parts needed to build an automobile.  Automakers source raw materials such as steel, rubber, plastic and glass as well as entire subsystems such as safety, exhaust, entertainment and heating/air conditioning systems from third party suppliers.  To keep costs low and quality standards high, automobile manufacturers in North America, Western Europe and Japan automate as many of the routine interactions with their suppliers as possible.  Buyers and suppliers of automotive parts use B2B integration technologies such as EDI and XML to exchange manufacturing forecasts, inventory positions, transportation activities and payment transactions.

Did you research your vehicle online before purchasing it?

Increasingly, consumers are researching car purchases online before actually visiting any dealerships.  If you have conducted research online before, you know that there is wealth of data available to consumers including dealer invoice prices, expert buyer reviews and vehicle comparison charts.   But you may not know that the car dealerships, automobile manufacturers and parts suppliers get just as much insight from your online research activities as you do.  Web site activity can be tracked and analyzed to help better forecast, which makes and models of vehicles consumers will purchase in the next 60 days.  Auto manufacturers need to know whether to build cars with four or six cylinder engines; weather to install leather or cloth seats; and whether to include navigation systems or just the standard entertainment package.  Dealers, manufacturers and suppliers use B2B integration technologies to exchange of web site log data between one another for these demand forecasting processes.

Did you test drive the vehicle before purchasing?

Most car dealers try to stock an extensive selection of different models on their lots to increase the odds that a consumer will be able to find the car of their choice within the available inventory.  During the purchasing process you probably did not give much thought as to how your dealership is able to afford to purchase and hold tens of millions of dollars worth of vehicle inventory.  Commercial banks offer a service called dealer floorplan financing to provide the short-term lending dealers need for inventory.   With millions of vehicles being purchased, financed and sold each month, automation is a critical factor in the dealer floorplan process.  B2B integration technologies are utilized to exchange information between the automobile manufacturers, the car dealerships and the commercial banks which provide the financing.  Dealer invoicing, inventory reporting, financing requests and payoff instructions data is exchanged using standards such as STAR and EDI.

Did you finance your new vehicle at the dealership?

One of the most popular options for financing new vehicle purchases is through the automaker’s captive financing division.  Dealerships utilize B2B integration technologies such as STAR to exchange credit applications, decisions and contracts with lenders such as Toyota Financial Services or GMAC.

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Did you register your new vehicle at the dealership?

AAMVAnet is a B2B integration service designed specifically to enable businesses such as lenders and dealerships to communicate electronically with your state’s Motor Vehicle Association.  Dealers can register the vehicle and apply for tags online.  And once you have paid off the loan, the title can be transferred into your name electronically by the lenders. 

Did you insure your new vehicle?

After returning home with your new vehicle, one of the first calls you probably made was to your insurance agent.  Few people realize that agents are not actually employees of the companies that underwrite your insurance policy.   Most agents are independent entities that sell exclusively on behalf of one insurer or sell policies for multiple carriers.  B2B integration technologies such as ACORD and EDI are used to exchange information about policies, ratings, claims and billing between these independent agents and the actual insurers.   Agents are not the only entities that companies communicate with electronically.  For example, insurers are required to provide state Motor Vehicle Associations with reporting that identifies vehicle owners who have not purchased the appropriate liability insurance for their vehicles.  So whether you purchased insurance or you did not, B2B integration technology was part of the process!

Have you performed any maintenance on your vehicle since purchasing?

If you are a car enthusiast you may have shopped at an automotive aftermarket retailer such as Advanced Auto Parts, Carquest or NAPA to pick up touch up paint, spark plugs or an engine filter.  Even if you are not a car expert, you have probably purchased motor oil, car wax or wiper blades at a general merchandiser such as Wal-Mart, Target or Sears.  You may not have given much thought as to the supply chain process that is used to stock these parts in the stores.  Aftermarket retailers utilized specialized B2B integration technologies with their parts suppliers to support merchandising, purchasing, transportation and payment processes.  Standards such as XML are used for Internet based parts ordering and PIES for sharing of product and price data.