General Motors, Ford Motor and DaimlerChrysler Thursday said they planned to form an Internet portal to connect all the companies serving the estimated $550 billion global market for automotive parts and services.
The first product for the as-yet-to-be-named venture will be CollisionLink, which will connect automotive dealership service centres with collision repair shops over the Internet, helping to eliminate wrong orders and cutting costs and time.
The automakers partnered with imaging and information management company Bell & Howell to create the venture. Each partner will own 25% of the company, which will be headed by Chuck Rotuno, formerly general manager of global automotive publishing with Bell & Howell`s publishing services division.
The venture will initially focus on the United States and Canada, but eventually expand globally, Rotuno said. The three automakers have held talks with other major automakers and would consider offering them an equity stake if they join the venture, said John Smith, GM vice president of service parts operations.
CollisionLink, currently in testing with less than 10 major dealerships, will ramp up in the first quarter next year and begin generating revenues in the second quarter, Rotuno said.
"We believe our new company`s capabilities will make a significant dent in overall collision, mechanical and fleet repair costs, while improving customer satisfaction," he told reporters at a news conference in Detroit.
The automakers currently capture about 70% of the parts used in collision repairs, but CollisionLink could help take business away from independent parts manufacturers, the automakers said.
Dealerships, which derive about half of their profits from parts and services, will be able to cut costs, trim their parts inventories and speed up the repair time, Smith said.
The venture will operate initially from Bell & Howell`s publishing services division headquarters in Richfield, Ohio, with a staff of about 50 people, Rotuno said.
The joint venture, the latest between the "Big Three" automakers, follows an agreement in February this year to funnel their combined annual $240 billion spent on parts and supplies through a single Internet portal.
That new company, called Covisint, will initially have no connection to the new venture, but they could share some business in the future, Smith said.
Renault SA, Nissan Motor have since also joined Covisint.
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