Automakers get involved; results mixed
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Efforts by automakers to inject competition into a dealer management system market dominated by two large suppliers have met with mixed success.
Four years ago, General Motors created the Integrated Dealer Management System to buy DMS programs for interested GM dealers using its purchasing clout to negotiate discounted prices and shorter contract terms from participating vendors than dealers could get on their own, said Dan Plouffe, the automaker's director of CRM digital marketing operations.
Today more than 50 percent of GM's dealers either buy their DMS through the IDMS program or from one of the four U.S. DMS vendors that participate, Plouffe said.
The participants are ADP Dealer Services, DealerTrack Holdings Inc., Auto/Mate Inc., Autosoft International Inc. and Quorum Information Technologies Inc.
ADP and Quorum also participate in Canada.
Reynolds and Reynolds Co., the dominant DMS vendor in the United States along with ADP, left the program about two years ago. The company balked at paying automatically for every new application that GM required of participating vendors, said Ron Lamb, Reynolds senior vice president of sales.
DMS systems handle the accounting, payroll and finance software used by dealers to manage their stores.
The program has provided cost savings to dealers, said Auto/Mate CEO Mike Esposito. Auto/Mate sells its DMS software under the GM program at about a 10 percent discount to retail, he said.
Plouffe said one of the draws of the program, besides pricing, was contract duration. GM requires that vendors offer month-to-month management system contracts through IDMS. Traditionally, dealer contracts with Reynolds and ADP are five years.
Another benefit is that GM dealers can be assured that any participating DMS vendor will have the latest applications and integration to communicate and transact with GM, he said.
That guarantee has helped dealers overcome the fear that if they went with a smaller DMS provider that they could be hamstrung in dealing with the factory, Esposito said.
Toyota Motor Corp. also is moving to give dealers more DMS options.
In a pilot program, DealerTrack and Auto/Mate are working with Toyota to integrate their systems with the factory, allowing seamless communication between dealers and Toyota, Esposito said.
Without that integration, dealership groups with even one Toyota store were reluctant to use any vendor other than Reynolds or ADP because of the hassle and cost of using multiple system providers, Esposito said.
The new integration opens the door to the smaller suppliers, he said.
That's crucial, said DealerTrack CEO Mark O'Neil. Toyota dealers, he noted, represent 7 to 8 percent of all U.S. dealers but 15 percent of vehicle sales.
You can reach David Barkholz at dbarkholz@crain.com. -- Follow David on 
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