eAuto Out of Gas

DALLAS--eAuto, an Internet-based business-to-business automotive aftermarket parts distributor, has ceased operations, saying that it is unable to secure a second round of funding “due to private and public capital market conditions.”

“The automotive aftermarket is in a lot of pain right now, as evidenced by the valuations Wall Street is placing on the industry’s largest companies,” said eAuto founder and Chief Executive Officer Malcolm Davidow. “Things will get worse before they get better to the extent the aftermarket does not address the very real challenges it faces in the areas of inventory management, reverse logistics, supply chain integration and electronic cataloging. The key to the success of any technology-centric model today is getting the mechanic to migrate from the telephone to the keyboard. Given that the eAuto model responded to each of those challenges, it is unfortunate the capital markets did not recognize that.”

Davidow said that numerous investors, analysts and customers confirmed eAuto’s business model was sound and that eAuto made exceptional progress on the execution of its strategy.

“eAuto’s B2B approach is unique in a number of respects from other models...which facilitate existing distributors,” said Jim Lang of Lang Marketing Resources in a report issued last November.

“eAuto’s virtual model streamlines aftermarket parts sales,” said Forrester Research’s W. Daniel Garretson in a Dec. 2000 brief.

Davidow said eAuto built one of the strongest aftermarket management teams among the Internet-based companies. In addition, the company had successfully secured products directly from more than 20 manufacturers, including Tier 1 OEMs, as well as first and second-line, aftermarket manufacturers.

eAuto will sell numerous assets that were deployed to support its e-commerce effort, including a diagnostics application that was to be released in the near future, a patent-pending real-time volume pricing program, electronic catalog database management systems and website content, as well as the eAuto brand and domain name.

eAuto debuted in 1996 as a directory site. Since its launch, eAuto served more than a million visitors. As an automotive portal, eAuto offered new car buying, financing, insurance, vehicle history reporting, credit reporting, website reviews, car reviews, chat rooms and headline news. eAuto also sponsored the Lehman Racing Top Fuel Dragster driven by IHRA Rookie of the Year and world-record-holder Clay Millican. In Nov. 2000, the company launched its business-to-business parts distribution efforts.