The National Automobile Dealers Association has ended its exclusive and controversial six-year endorsement of the Cobalt Group, the Seattle technology vendor that builds Web sites for dealers.
Competitors felt the endorsement was giving Cobalt an unfair advantage. Cobalt is the only automotive retailing software provider ever to be endorsed by NADA.
When NADA endorsed Cobalt in 2000, the goal was to get a majority of NADA's members on the Internet with a Web site that they could use to market to customers and prospects, says Dick Malaise, NADA's chief information officer. "We feel that we've achieved that goal," he says.
In 2000, more than 25 percent of new-car dealers in the United States had no Web sites. Thousands of other dealers had sites that were little more than online billboards with no capability for capturing leads and driving customers through the sales process, Malaise says.
"Now, as a direct result of this endorsement, 98 percent of dealers in the U.S. have built Web sites and are competing online," he says. "So it was a good project. We worked together well, and we think we brought the dealers where they need to be for that part of their business."
Both NADA and Cobalt say that it was time to end the arrangement and that they have reached their goal.
Cobalt CEO John Holt says: "It worked to the benefit of dealers. It worked to the benefit of NADA because it put them in a leadership role, and it worked to the benefit of Cobalt because it helped us build our business."
The endorsement riled some vendors that also were peddling Web site construction services to dealerships.
"Hallelujah" was Amir Rezvani'sreaction to the news. Rezvani is co-founder of DealerOn Inc., which builds dealership Web sites and enhances existing sites. The company is in Rockville, Md., near NADA headquarters in McLean, Va. "Every time we've approached NADA we've had every door shut in the past due to the relationship between Cobalt and NADA," Rezvani says.
Despite the NADA endorsement, DealerOn targeted Cobalt customers and was able to sell them enhancements for their Web sites, he says. "Now it's going to be even easier," Rezvani says.
While NADA no longer is endorsing a vendor, it has posted three lists of technology vendors on its Web site.
You may e-mail Ralph Kisiel at [email protected]