The nation's biggest automakers are teaming up with the world's biggest information technology companies to put the latest online technology into cars by the 2003 model year for as little as $300.
Using in-vehicle information systems developed by International Business Machines Corp., Motorola Inc. and Intel Corp., automakers and dealers will be able to remain in constant contact with their customers by providing a variety of services, including instant, wireless notices of an impending vehicle failure. Customers also will be able to gain access to home or work computers from their vehicles.
Some of the companies involved in the alliance demonstrated the planned systems for The Washington Post on Sunday and today during the National Automobile Dealers Association (NADA) annual meeting being held here.
Another company, Newgen Results Corp. of San Diego, will provide electronic customer-relations-management services to the auto industry by, among other things, automatically setting up guaranteed service appointments for emergency vehicle repair and routine automotive maintenance. The system will also make available pricing and vehicle information and help set up visits with dealers for haggling over a new car.
The aim is to build customer loyalty by keeping dealers in constant contact with car owners--and presumably help take sales from a proliferation of dot-com businesses such as CarsDirect.com, IntelliChoice.com and, most recently, InvoiceDealers.com, that have established themselves as intermediaries in the vehicle-buying process.
The new alliance also is meant to end a long-running dispute between automakers and dealers over who will control the future of auto retailing in the United States.
Both General Motors Corp. and Ford Motor Co., for example, angered dealers last year by attempting to establish factory-owned stores that, through Internet sales, could have bypassed traditional auto dealers in the retail process.
Led by NADA, the dealers successfully appealed to state legislatures nationwide to block the Ford and GM moves.
GM and Ford executives, including GM Chairman John F. Smith Jr., said here that they are ending the fight. They and their dealers will work to become better e-tailers than the independent dot-com auto businesses crowding the market, executives said.
"It's a matter of common sense," said Virginia auto dealer Lou N. Kairys, a NADA board member who championed the fight against factory-owned stores.
"Leaving the dealers out of the retail process would have hurt everyone, including the manufacturers, who were never very good at running retail operations; and the consumers, who would have been set adrift, not connected to anyone responsible for servicing their cars or handling other problems," Kairys said.
"Either we enter this new [Internet] age together, or we die separately and let some third party take over the business," Kairys said, adding that the nation's 22,400 franchised auto dealers, with technological support, can beat anyone in the e-commerce game.
If that is true, "we are in trouble," said Eli Kuo, spokesman for InvoiceDealers.Com, an independent Internet auto retailing service based in Palo Alto, Calif.
The independents have been successful largely because both the automakers and their dealers have failed to win the trust of consumers in the retail arena, Kuo said. The failure or reluctance of many dealers to provide adequate online vehicle pricing information, the ineptitude of many dealerships in handling customer e-mail inquiries, and the reluctance of car companies to provide safety recall and other information online all have worked in favor of the independents, Kuo said.
Kuo said he is concerned about the new alliance among automakers, dealers and the blue-chip information-technology companies. But he said he believes consumers always will want a credible third party to help compare products and pricing.
But if the new alliance has its way, that might turn out to be wishful thinking. The alliance's plan calls for IBM, Motorola and Intel to take the lead in developing an in-car computing platform for $300 to $500 that far exceeds the capabilities of models costing as much as $2,000 that are currently used in luxury cars and trucks.