Automakers are getting together online again, this time to create an exchange for dealers and parts manufacturers and to stake their claim in the automotive aftermarket e-business.
Ford Motor Company's Automotive Consumer Services Group, the Mopar Parts Division of DaimlerChrysler, General Motors Service Parts Operations and Bell & Howell have announced they are forming an e-marketplace for authorised dealers as well as parts and service suppliers to conduct business on. The yet to be named site is in pilot form now, with a few dealers. It is expected to go live in the U.S. and Canada in the second quarter of 2001. Chuck Rotuno, senior VP and general manager at Global Automotive Publishing has been named president and CEO of the venture.
The manufacturers are going after a growing list of competitors that have built after market online exchanges, including the Cobalt Group's MotorPlace.com and iStarXchange, founded by Toyota and i2 Technologies.
"Dozens of dot-coms have popped up, each with the promise of bringing an Internet-based solution to automotive parts retailing," said John F. Smith, GM VP and general manager of GM Service Parts Operations in a prepared statement. "This venture is different for two reasons, firstly, it represents the three largest vehicle manufacturers in the U.S. and the leading provider of automotive parts catalogs. These players have the nresources and their respective existing dealer and customer bases to assure success. Second, we have the bricks to go with the clicks. We have Original Equipment (OE) parts, up-to-date OE catalog data, OEM service information and the largest dealer network in the world to service the automotive repair after market. No other players have such extensive assets."
Like the car makers themselves, the site will likely dominate the industry and squeeze out other players. "The automakers are standing up and saying, 'When it comes to OEM parts, its our channel and we're going control that,'" says Kevin Prouty, research director, automotive strategies at AMR Research in Boston. "It's going to freeze the market. No one now is going to join the other exchanges or invest in them."
Other car makers -- including Isuzu, Jaguar, Land Rover, Mazda, Saab, Saturn, Subaru and Volvo -- plan to participate in the portal. But AMR's Prouty points out that all those manufacturers are either owned in whole or in part by one of the Big Three. Jaguar, LandRover, Mazda and Volvo belong to the giant Ford corporation, whilst Saab and Isuzu live under General Motors' wing.
The new exchange's first service will be CollisionLink, an application developed by Bell & Howell that automates the parts ordering process between dealers and collision shops. Ford, DaimlerChrysler and GM have also formed Covisint, the e-marketplace for the car makers to buy parts and materials that officially launched in October.
