Nissan dealers expect DMS costs to drop
Brand OKs more vendors, encourages competition
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Nissan North America Inc. is overhauling its dealer communication system and doubling to eight the number of dealer management systems able to communicate automatically with the factory, says Walter Mullen, Nissan North America senior manager of dealer systems.
The increased competition should allow dealers to negotiate better deals for DMS software, said Bob Benoit, dealer principal of the Anchor Auto Group in North Smithfield, R.I., near Providence. His Anchor Nissan and Anchor Subaru sold a total of about 3,000 new and used vehicles in 2011.
"This potentially is going to save money for dealers," said Benoit, whose DMS provider is being added to the list.
That vendor, Auto/Mate Dealership Systems, charges Anchor Nissan less than half what the large DMS providers typically charge dealers, he said.
The DMS is the computer nerve center of a dealership, storing and calculating everything from payroll and accounting to inventory and customer transaction data.
The new DMS choices are part of Nissan's plan to start in April to replace its 25-year-old dealer communication system, which connects dealerships to the factories.
Toyota also has nearly finished revamping its dealer communications system for its 1,150 U.S. Toyota and Lexus dealers.
Nissan and Infiniti dealers have been "begging" for years for a more robust communication system that would give them more options for DMS vendors, Mullen said.
A better communication system will allow the factories to track current sales and repair activity at dealerships. For instance, if repair bills spike, the automaker can fix quality problems quickly or increase factory production when certain car models get hot, Mullen said.
Nissan will roll out the sales and back office piece of the system to its 1,063 U.S. dealers this year and begin the parts and service piece in 2013, Mullen said.
The final phase has Nissan linking with the carmaker's Canadian dealers and nearly 200 Infiniti dealers in the United States, he said.
Benoit at Anchor Nissan said he is bullish on the roll-out because his current DMS provider, Auto/Mate, is one of the four DMS vendors being added to the Nissan system.
Today, Nissan's system is integrated with ADP Dealer Services, Reynolds and Reynolds Co., DealerTrack Inc. and Procede Software. The integration means data entered at a Nissan store using one of those four DMS providers can be sent automatically to the factory, and vice versa.
Because Auto/Mate is not currently directly connected with Nissan, Benoit said his staff has to "double-key" information first into the Auto/Mate DMS and then into the store's links with Nissan. Those extra steps cost Anchor Nissan time and money, he said. He said he had 31,000 repair orders at the stores last year.
But Benoit still considers Auto/Mate a bargain because Auto/Mate costs his two stores about $2,000 a month together -- about one-third the cost of systems from bigger players such as ADP or Reynolds, he said.
"It's a good thing any time the factory has an open architecture and allows the dealers to be independent in their vendor selection," Benoit said.
Nissan's Mullen said AutoSoft Inc., Adam Systems and Automotive Computer Services Inc. are the other three DMS providers scheduled to be integrated with the new communication system.
Infiniti now has its own DMS, which is used exclusively at Infiniti dealerships, he said. All eight DMS providers eventually will be available to Infiniti dealers as well as additional DMS providers for Nissan and Infiniti dealers in Canada, including Quorum Dealer Management Systems and PBS Systems Group.
Toyota is completing a two-year roll-out of its new dealer communication system, said David Jackson, national technology manager of field operations.
Toyota also heard from dealers that they wanted a real-time link with the factory, Jackson said.
That information has allowed Toyota to keep dealers apprised of how close they are to meeting monthly sales incentives goals, Jackson said.
And Toyota owners who log into their Toyota accounts can see up-to-date repair orders and other information whenever it is convenient for them to view it, he said.
Toyota's connection with additional DMS providers permitted Five Star Dealerships in Aberdeen, Wash., to switch DMS vendors six months ago from Reynolds and Reynolds to Auto/Mate, said Mike O'Dell, general manager of operations.
The switch is saving Five Star Dealerships more than 50 percent on monthly DMS fees, O'Dell said.
"The new Toyota platform opened the doors for us," he said.
Five Star Dealerships has three locations, which include franchises for Toyota, Scion, Chevrolet, Buick, Ford, Lincoln, Chrysler, Jeep and Dodge. New and used automotive sales for 2011 were 2,391 units, 961 of them at the Toyota location.
Reynolds has sustained its numbers with Toyota and Lexus stores despite the increased competition under the new dealer communication system, said Reynolds spokesman Tom Schwartz.
He said the company expects to remain competitive with Nissan stores under the new system, while Reynolds and Reynolds hopes to pick up some of the Infiniti stores that now use Infiniti's in-house DMS known as InfinitiNet.
• Current: ADP, Reynolds, DealerTrack, Procede
• New: Auto/Mate, AutoSoft, Adam Systems, Automotive Computer Services
You can reach David Barkholz at dbarkholz@crain.com. -- Follow David on 
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