Big three automakers to launch dealer site

Following the launch of their Covisint e-marketplace, the big three automakers in the US are joining up once again to roll out a new exchange catered to the aftermarket parts business.

Automakers are getting together online again, this time to create an exchange for dealers and parts manufacturers and to stake their claim in the automotive aftermarket e-business.

Ford Motor Company's Automotive Consumer Services Group, the Mopar Parts Division of DaimlerChrysler Corp., General Motors Service Parts Operations and Bell & Howell announced they are forming an e-marketplace for authorized dealers and parts and service suppliers to conduct business.

The yet-to-be-named site is in pilot now with a few dealers and is planned to go live in the U.S. and Canada in the second quarter 2001. Chuck Rotuno, senior VP and general manager, Global Automotive Publishing, at Bell & Howell Publishing Services, was named president and CEO of the venture.

The automakers are going after a growing list of competitors that have built automotive aftermarket online exchanges, including the Cobalt Group's and iStarXchange, founded by Toyota and i2 Technologies.

"Dozens of dot-coms have popped up, each with the promise of bringing an Internet-based solution to automotive parts retailing," said John F. Smith, GM VP and general manager of GM Service Parts Operations in a prepared statement.

"This venture is different for two reasons. First, it represents the three largest vehicle manufacturers in the U.S. and the leading provider of automotive parts catalogs. These players have resources and their respective existing dealer and customer bases to assure success. Second, we have the bricks to go with the clicks. We have OE parts, up-to-date OE catalog data, OEM service information and the largest dealer network in the world to service the automotive repair aftermarket. No other players have such extensive assets."

Like the automakers themselves, the site will likely dominate the industry and squeeze out other players. "The automakers are standing up and saying, 'When it comes to OEM parts, its our channel and we're going to control that,'" says Kevin Prouty, research director, automotive strategies at AMR Research in Boston. "It's going to freeze the market. No one now is going to join the other exchanges or invest in them."

Other carmakers - including Isuzu, Jaguar, Land Rover, Mazda, Saab, Saturn, Subaru and Volvo - plan to participate in the portal. But AMR's Prouty points out that all those manufacturers are either owned in whole or in part by one of the Big Three.

The new exchange's first service will be CollisionLink, an application developed by Bell & Howell that automates the parts ordering process between dealers and collision shops.

Ford, DaimlerChrysler and GM have also formed Covisint, the e-marketplace for the automakers to buy parts and materials that officially launched in October.