Reynolds and Reynolds Co. is making "significant margin" on its deal with General Motors to provide all 438 Saturn dealerships with a dealership management system.
"We are not giving our product away," said Reynolds CEO Finbarr O'Neill. If price were the only consideration, the negotiations with GM would not have lasted long, O'Neill said during a press briefing Saturday.
In December GM named Reynolds, of Dayton, Ohio, as the exclusive provider of computers, software and services for Saturn dealerships. In one fell swoop, Reynolds picked up 438 new customers, snatching them from its archrival, ADP Dealer Services.
The transition for Saturn dealerships from an ADP system to a Reynolds system will begin in August 2007 and is expected to be completed by May 2008.
"We've packaged solutions and priced them at a value, but this is still a rewarding transaction for us," O'Neill said. He is not providing pricing to Saturn dealers, but he says Reynolds will in the "relatively near future."
The critical negotiating point with GM was the ability for Saturn dealers' management system to push data back and forth between dealership and OEM, O'Neill said.
Not only did GM give Reynolds all its Saturn dealerships; it also named Reynolds and Canadian vendor Quorum Information Technologies Inc. as its preferred vendors. GM is encouraging all 7,300 GM dealers to switch to the Reynolds or Quorum dealership management system.
ADP executives said yesterday that there is confusion about the GM-Reynolds deal.
"Our dealers are telling us they are confused. They don't know what it's about," said Kevin Henahan, ADP's senior vice president of sales and marketing.
He said non-Saturn GM dealers must decide whether they want to choose their own dealership management system or relinquish control to GM.
You may e-mail Ralph Kisiel at [email protected]