Carmakers Planning Parts Portal

DETROIT--CNET News is reporting that Chrysler, Ford and General Motors plan to create an Internet parts portal firm that electronically links auto dealers with repair shops.

The new company, which has yet to be named, will provide technology, services and an Internet portal that will connect auto dealers to the shops that buy their repair parts, according to CNET.

An Internet tune-up could do the auto parts business some good, reported CNET’s Erich Luening and Melanie Austria Farmer. Roughly 60 percent to 70 percent of all parts orders that come out of the market are inaccurate, according to industry estimates they cited. These inaccuracies lead to supplemental orders, which translate to a delay in service and a greater cost to consumers, they wrote.

Executives from the Big Three automakers said the new company, which is expected to be in full swing by spring, will try to automate and streamline the ordering process between parts suppliers and the repair shops. The technology and services will be built around an Internet portal, which is now in a pilot program.

The company’s revenues will be driven by subscription and transaction fees, CNET said.

Daimler, Ford and GM are also involved in another Internet venture known as Covisint, an online marketplace expected to simplify the vast amounts of paperwork and time the automakers spend on purchasing orders.

“Covisint, which is expected to handle several hundred million dollars per year in purchasing, is one of the more high-profile examples of a slew of initiatives by automakers to harness the power of the Internet,” they reported.

“All automakers are scrambling to move their businesses online to improve communications, cut costs and streamline business among their old-line network of parts makers, buyers, dealers and other keyplayers. Other carmakers including Toyota and Volkswagen have also tapped into the world of online exchanges and websites in an attempt to get a competitive edge.”

Daimler, Ford and GM, along with carmakers Renault and Nissan and technology partners Commerce One and Oracle, provided all of the start-up funds for Covisint, said CNET. “The venture, which has faced government scrutiny and its share of technical challenges, is still hunting for a chief executive officer.

The new parts portal will be based initially in Richfield, Ohio, and will employ about 50 to 60 workers. Bell & Howell, a maker of electronic catalog technology for the auto parts industry, will be the lead technology and integration services provider for the venture, CNET said. Executives said more technology partners are expected to join as it moves forward.

Chuck Rotuno, formerly general manager of global automotive publishing at Bell & Howell, will be the chief executive of the new venture.

The new company is different from the dozens of dot-coms that have popped up targeting the auto parts market, according to John Smith, GM’s vice president of service parts operations, as quoted by CNET.

“These players have resources and their respective existing dealer and customer bases to assure success,” Smith was quoted as saying.

The company also has “the bricks to go along with the clicks,” he said. Its resources include the original equipment parts, related catalog and service information, and an international dealer network, he said.

To read the piece in its entirety, contact http://news.cnet.com/news/0-1007-202-4041628.html.