The US sales arm of Toyota Motor said Wednesday it has formed a new company with software maker i2 Technologies to put the $100 billion US automotive replacement parts market on the Internet.
Toyota, Japan`s No. 1 automaker, will hold a majority stake in the new company, iStarXchange, which is scheduled to start operation in the second quarter. Toyota and i2 officials said they will eventually sell shares to the public.
iStarXchange is the latest effort by an automaker to grab a piece of the exploding electronic commerce market. It aims to provide an electronic marketplace for about 160,000 buyers and 66,000 sellers scattered around the United States for everything from mufflers and spark plugs to accessories. There are an estimated 10 million different parts involved.
The network will not be open the general public. It will link suppliers such as Delphi Automotive Systems with distributors like AutoZone, local parts stores, new car dealers and independent businesses that install aftermarket parts and accessories.
"For a small transaction fee, (iStarXchange) will offer users a one-stop electronic marketplace that quickly connects buyers and sellers on-line and supports more efficient use of inventories," Toyota Senior Vice President J. Davis Illingworth said at a news briefing.
Using iStarXchange should drive costs down, Illingworth said, because buyers and sellers will be better able to manage their inventories, find each other more easily, as well as hold auctions and reverse auctions for parts.
iStarXchange will consider offering computers to businesses that need to connect to the Internet. The company will be based in Southern California and eventually be staffed by about 100 workers. Initial staffing has come from Toyota and i2.
Illingworth would not disclose Toyota`s investment thus far, saying it is "significant."
Toyota Motor Sales USA is based in Torrance, Calif. i2, located in Dallas, had 1999 revenues of $571.1 million.
i2 last month said it would provide software and services to General Motors`s new Internet supplier network, TradeXchange. GM and Ford Motor have both been courting Toyota to join their business-to-business Internet networks, but Toyota officials said on Wednesday the aftermarket deal is separate from that.
"This is a space where they presently are not in," Illingworth said.
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