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Major automakers team up on second B2B venture

Computerworld

(IDG) -- General Motors, Ford, and DaimlerChrysler are at it again, teaming up on a second ambitious online business venture: this time to develop a business-to-business Internet portal through which the Big Three automakers plan to sell repair parts to their dealers.

GM, Ford and DaimlerChrysler jointly announced that they're working with Skokie, Ill.-based software 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 world's biggest 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.

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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.

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. Like other business-to-business ventures, they added, 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 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 the 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's I-Star; Plano, Texas-based Electronic Data Systems' Driversshield.com; and another exchange operated by Dayton, Ohio-based start-up ChoiceParts.

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."




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