General Motors Corp., Ford Motor Co., and DaimlerChrysler AG are at it again, teaming up on a second online business venture: this time to develop a business-to-business Internet portal through which their dealers will be able to sell repair parts to body shops and other customers.
GM, Ford and DaimlerChrysler today jointly announced that they're working with Skokie, Ill.-based technology vendor Bell & Howell Co. to build the as-yet-unnamed Web site. All four companies will have ownership stakes in the new venture, which is due to open for business early next year.
The new joint project follows last February's move by the Big Three automakers to set up a single business-to-business exchange for automating purchases of goods from their suppliers. That Southfield, Mich.-based exchange, called Covisint, began processing transactions two months ago after receiving antitrust-related clearances from the U.S. Federal Trade Commission and the German government (see story).
In addition, Detroit-based GM; Dearborn, Mich.-based Ford; and Stuttgart, Germany-based DaimlerChrysler last month said they had agreed to develop a common networking infrastructure for their respective dealers (see story).
The automakers said the repair parts portal will initially be launched in the U.S. and Canada, "with the vision of going global" at a later date. Likewise, the portal at first will support sales of parts to auto-body collision shops and other dealers, but plans call for that to be widened to include other customers in the future.
Like other business-to-business ventures, the Big Three said, the new one will be aimed at reducing supply-chain costs, streamlining transaction times and improving the flow of information between participants.
Kevin Prouty, an analyst at AMR Research Inc. in Boston, said the portal looks like a step in the right direction for auto dealers. "This is really a shot at trying to make the dealers happier in how they work with the automakers," he said, adding that there are few dealers that work exclusively with one automaker.
However, the Big Three already have competition. Their portal will compete with other online parts exchanges that have already been launched, such as Tokyo-based Toyota Motor Corp.'s I-Star; Plano, Texas-based Electronic Data Systems Corp.'s Driversshield.com; and another exchange operated by Dayton, Ohio-based start-up ChoiceParts LLC.
Unlike Covisint, which is expected to garner wide industry support, the parts portal isn't likely to gain easy acceptance among dealers, Prouty said. "It won't freeze the market, so it's not a significant threat to parts vendors," he said, adding that the automakers will have to "convince dealers to use it."
Other automakers affiliated with the Big Three, such as Isuzu, Jaguar and Land Rover, also plan to participate in the parts portal, according to today's announcement. Chuck Rotuno, formerly the general manager of global automotive publishing within Bell & Howell, was named president and CEO of the new venture.
The portal will use CollisionLink, an online system developed by Bell & Howell, to provide cost estimates on parts and to process and validate orders. In addition to its technology businesses, Bell & Howell is a top vendor of automotive parts catalogs -- the business unit at which Rotuno worked previously.
Related stories:
- Texas judge recommends $1.7 million fine against Ford for selling used cars online, Dec. 5, 2000
- Ford names new CIO, Dec. 4, 2000
- Conference: B2B hype and reality differ greatly, Nov. 29, 2000
- Exchanges find barriers to global e-sales, Nov. 27, 2000
- GM deal for Web-based dealership software falls through, Nov. 16, 2000
- B2B exchanges eye FTC report on antitrust issues, Nov. 3, 2000