Ford Motor Co. is investing in an auto-repair service and angering its already disgruntled dealer body.
Critical dealers view Ford's investment in JoeAuto.com as direct competition with dealership service operations. Customers schedule service appointments on the Internet at JoeAuto.com repair shops, not franchised dealerships.
JoeAuto.com is a startup operation, and Ford's investment is meager. But dealers object to the principle.
'The thing that angers me is that they are going to compete with us,' said Jerry Reynolds, chairman of the Ford Division National Dealer Council. 'I will always adamantly oppose anything that could potentially take dollars away from dealers.'
Ford said it invested in JoeAuto.com to gain an inside view of its Internet technology and customer handling.
'JoeAuto has a completely developed model for providing automotive maintenance and light-repair service appointments and customer follow-up online,' said Jerree Martin, Ford spokeswoman. Ford wants to learn how to create an Internetservice system that can eventually be used by its dealers, she said.
For example, JoeAuto.com customers schedule appointments and pay online. Customers also may watch repairs being completed via Web cameras. JoeAuto will pick up the vehicle, supply a loaner and drop off the vehicle when repairs are completed.
JoeAuto operates an eight-bay prototype shop in northwest Houston that opened in April 2000. A second 28-bay store is being built in midtown Houston and will open in June, said Lynn Graham, JoeAuto founder, president and CEO. The company is based in Houston.
Ford's latest run-in with its dealers is another event in a period of rocky relations.
Dealers still are smarting over the automaker's aborted foray into store ownership via the Ford Retail Network. Tempers also rose when Ford, Lincoln and Mercury started a dealership certification program now being contested in court. Ford Division ranked last in the most recent dealer attitude survey of the National Automobile Dealers Association.
JoeAuto.com customers will be referred to Ford, Lincoln and Mercury dealers for warranty and recall repairs, medium and heavy repairs, body shop repairs, parts sales and vehicle sales, Martin said.
Reynolds acknowledged that JoeAuto.com has developed technology that could be a boon to dealers. For example, JoeAuto provides customers with e-mail updates on the progress of a repair and scheduled completion time.
But Ford should still have passed on the deal, he said. 'Even if there is some gain, it is not worth risking dealer relations for it,' Reynolds said.
Ford will take one board seat on JoeAuto.com.
Dealers learned of Ford's investment when the privately held company confirmed earlier this month that it raised $13.5 million from Ford, CCG Venture and other investors. Ford completed the transaction late last year, Martin said.
Neither Ford nor JoeAuto would disclose Ford's investment or percentage of ownership.