Big Three Automakers Reach Pact on Dealer Networks

Computerworld - Setting Motor City rivalries aside, DaimlerChrysler AG, Ford Motor Co. and General Motors Corp. reached an agreement earlier this month to establish a common networking infrastructure for their dealer networks.
The Big Three automakers anticipate that most of their applications, such as those used to manage services to customers and track vehicle inventories, will migrate to the Web within the next three years.
Agreeing to a network infrastructure standard appeases multifranchise dealers that sell vehicles from several automakers, analysts noted.
"Its what they had to do," said Jonathan Gaw, an analyst at IDC in Framingham, Mass. "Most dealers work with multiple manufacturers and nobody wanted to support more than one system. The Big Three coming together will go a long way to developing an instrument for the dealers and manufacturers to communicate more efficiently."
The network infrastructure guideline includes specifics, such as browser types, network equipment and connectivity requirements, that are up to dealers to implement, said officials from DaimlerChrysler in Stuttgart, Germany.
Jim Yost, CIO at Dearborn, Mich.-based Ford, said the technical guidelines would benefit dealers by providing a road map for building Internet-ready dealerships. "We are using technology to drive the business," he said. "The business is looking for every opportunity to improve performance and to be more responsive to customers."
The push is part of an overall thrust to enable build-to-order systems that let customers configure and select vehicles direct from the automaker's production lines or inventory.
But thus far, experiments with Web-based ordering systems have had less than stellar results. Earlier this month,
Detroit, Mich.-based GM launched a pilot test of a Web-based ordering system designed to let people in the Minneapolis-St. Paul area configure and order Oldsmobile Aleros direct from the company. The system cuts the order-processing time from about 60 days to 15 or 20 days.
Guaranteed Prices
Customers may explore GM's main inventory at www.gmbuypower.com and are guaranteed a price online that falls below the manufacturer's suggested retail price (MSRP). GM officials said fewer than 10 customers have bought a vehicle through the pilot program, which launched in September.
Ford launched a similar pilot in Ottawa last August [Business, Aug. 21]. Called BuyerConnection, the system allows consumers to configure vehicles online and buy from one of the two-dozen local dealers in the pilot. The program uses what Ford calls an "e-price," which is lower than the MSRP.
Once customers decide to buy, the system gives them contact information for the local dealers that are participating in the e-price program.
The pilot program includesonly 24 of the 565 dealers in Canada and offers pricing on just three vehicle lines. Sales via the system have been minimal, Ford officials said.
Creating a common Web-based network infrastructure "is barely a step in tackling the marathon of difficulties of creating a build-to-order system," said Gaw. Build-to-order is a long way off, because it involves redesigning factory systems and supplier fulfillment processes, he said, but Web communications with the dealers is an important start.