Automakers Launch Internet Parts Purchasing Service in Northeast Ohio

Strategic Insights -

Automotive manufacturers Ford, General Motors, and DaimlerChrysler are joining forces with Bell & Howell Corporation to launch an internet-based purchasing service for auto repair shops to buy parts from original equipment manufacturers. The new company, built on a limited liability framework, aims to improve the accuracy and efficiency of parts orders by replacing phone calls and faxes with secure internet pages. The service, which has been in the planning stages since May, is expected to launch by June 1. The site's initial focus will be on collision shops, but it will eventually expand to general service and repair shops, as well as vehicle fleet operators.

Key Takeaways:

  • The new company is a joint venture between Bell & Howell, Ford, General Motors, and DaimlerChrysler, with each entity owning 25% equity.
  • The service will initially employ 50 people, including 25 from Bell & Howell's product development team.
  • The site will provide online parts quotes, orders, and order validation between dealers and collision shops, aiming to reduce errors in parts orders from 70%.
  • The company's president and CEO will be Chuck Rotuno, senior vice president and general manager of Bell & Howell's Global Automotive Publishing division.
  • The service will have a different focus than Covisint, the joint auto supplier portal set up by the automakers.
  • Parts made by the automakers have a 70% share of the collision repair market, estimated at over $10 billion annually worldwide.
  • The site's goal is to reduce the time for repairs and provide efficient access to original equipment manufacturer parts.

Statistics:

  • 50 employees will be initially employed by the new company.
  • 25 employees will be from Bell & Howell's product development team.
  • 70% of parts orders from private repair shops to nearby auto dealers contain some error.
  • Over $10 billion is the estimated annual value of the collision repair market worldwide.
  • 25% equity ownership is held by each of Ford, General Motors, DaimlerChrysler, and Bell & Howell.

Sources:

  • "Automakers set up Web site to speed repair orders."
  • "Automakers set up Web site to speed repair orders."
  • John Smith, vice president and general manager of service parts operations for General Motors Corp.
  • Darrell Davis, senior vice president of service and parts operations for DaimlerChrysler.
  • Mike Jordan, president of Ford's Automotive Consumer Services Group.