First there was Covisint. Now the Big 3 are uniting again, this time to create an Internet portal to drive more parts sales and make it easier for dealers to sell parts to collision repair shops.
The unnamed company is a united effort by DaimlerChrysler, Ford Motor Co., General Motors and technology provider Bell & Howell Co. against upstart dot-coms and others that have sprouted in the $100 billion aftermarket parts arena.
The partners' first goal is to automate parts orders between dealers and collision repair shops, which handle about $15 billion in business annually. They say the portal - www.oeconnection.com - will speed ordering between dealers and repair shops, bring accuracy to part orders and reduce cost.
'Our respective dealers have told us of their frustrations and their wholesale customers' frustrations with the current dot-com middlemen inserting themselves in the value chain, charging additional percentages yet providing few solid benefits,' said John Smith, GM vice president and general manager of GM Service Parts Operations.
Mike Jordan, president of Ford's Automotive Consumer Services Group, predicted that this model - combining an Internet portal with dealers -will be difficult to match.
'Today, business between dealers and independent body shops is 19th-century stuff - all handwritten and telephone calls,' he said.
'It doesn't do any good to have the clicks without the bricks,' Jordan said. 'We have the bricks - the parts and technical information. This is a pretty unbeatable model.'
Each partner owns 25 percent of the new company, which will have headquarters at Bell & Howell Publishing Services in Richfield, Ohio. It will have about 50 employees.
There are no plans to take the company public. The new company will generate revenue through subscription and transaction fees, but the parties would not provide any revenue projections. Other automakers could join the venture, the partners said.
CollisionLink is the first product. It will focus on dealer-to-collision shop and dealer-to-dealer transactions. CollisionLink electronically streamlines parts quoting, ordering and order validation between dealers and collision shops.
Chuck Rotuno, who was Bell & Howell's senior vice president of Global Automotive Publishing, is the new company's president and CEO. The portal will be operational in the United States and Canada during the first quarter of 2001, and it will be rolled out globally gradually.
The portal will provide value, said Daniel Garretson, senior analyst at Forrester Research Inc. in Cambridge, Mass.
`Fragmented and complex'
'The aftermarket is such a fragmented and complex area, with hundreds of thousands, even millions, of parts and so many different players,' Garretson said.
One of those players, ChoiceParts LLC of Chicago, reacted cautiously to the news.
'There obviously does appear to be a lot of similarities in our respective business models,' said Choice-Parts CEO Chan Galbato. 'Whether that means we have complementary or competing products I think is still to be determined.'
ChoiceParts, an electronic service that allows dealers to find and order parts from other dealers and to track ordered parts, has 8,500 retail auto dealership customers, he said.
'We agree that there is a lot of clutter in the marketplace, and the customers do need real solutions,' Galbato said. 'Given a level playing field - assuming that it is a level playing field - I feel very confidently in our ability to compete in this marketplace.'