Reynolds and Reynolds Co. sees Europe as the next big battleground with its chief rival, ADP Dealer Services.
The two largest vendors of dealership management systems already butt heads daily in the United States, splitting about 80 percent of the market.
But ADP's move last month in Europe signaled the importance that region will play for these two dealership computer and software titans.
ADP, of Hoffman Estates, Ill., in December significantly improved its footprint in Europe and around the world by purchasing Kerridge Computer Co., of England, for about $300 million.
Before that deal, ADP did business in 14 countries in North America and Europe. Now it will conduct business in 41 countries on four continents.
Kerridge is a privately owned company founded in 1976 with headquarters in Hungerford, in southeastern England.
Kerridge has annual revenues of about $150 million. It is the largest provider of dealer management systems in the United Kingdom, where ADP had only a small presence.
Not to be outdone, Reynolds CEO Finbarr O'Neill says international growth is a key to continued growth of the company.
Reynolds has a 39 percent share of the $1.7 billion dealership management system market in North America, O'Neill said. He puts the European market at $900 million.
"We're committed to growing our presence in Europe," said O'Neill, in an interview during the Automotive News World Congress Jan. 17 in Dearborn, Mich. "The potential market outside North America is nearly as large as the North American market."
Reynolds, of Dayton, Ohio, will focus on the Big 5 -- Great Britain, France, Germany, Italy and Spain, he said.
Reynolds stepped gingerly into the European market in October 2003 with its $7 million acquisition of Incadea AG, a privately held firm in Raubling, Germany.
Incadea had 3,500 users of its software in 200 dealerships spread over 18 European countries. Now Reynolds wants to grow more in Europe on the back of this platform, based on Microsoft Navision technology, which can be used with only minor changes in any dealership on the continent, O'Neill says.
On Jan. 18 O'Neill told Wall Street analysts in San Francisco that Reynolds has tripled its installed dealership base in Europe with the Incadea acquisition and has 13,000 users in 640 dealerships in 27 countries outside of the United States. That's up from 3,500 users in 200 dealerships when it purchased Incadea in 2003.
"We have significant wins with Toyota Belgium and Peugeot Germany to implement the Incadea platform in over 135 locations, and gedas AG selected Incadea as its platform in over 50 Volkswagen dealerships," O'Neill says. "We are pleased with our progress."
You may e-mail Ralph Kisiel at [email protected]