EDS Involvement in Automotive Retailing

[Matt Parsons]

Topic Category

[PRFTEX]

I'm a DMS@NET user and am curious what impact the recent announcement by R+R and GM will have on EDS. If I understand it correctly, whatever they are working on will be on an "open platform", but I'm suspicious; we all have bad memories of the days in the not too distant past when these type arrangements cost dealers a lot of money and/or efficiency.
I researched systems for a very long time before going with EDS and was somewhat surprised by the recent news because I felt that the EDS equipment and network structure fit perfectly with the type of things that they (GM and R+R) are talking about doing. How quickly will EDS be able to offer things like online appointments, etc.? It seems to me that the system is capable now; why the holdup?

------------------

[Matt Parsons]

Well, you asked several questions, let me see if I can answer them all.

First, the effects of the GM/R+R announcement. I participated in a conference call with GM yesterday (05/16/2000)on this subject. From what we can tell at this time, R+R will be developing applications that sit in between a dealers DMS system and e-GM applications such as Buy Power. Connecting to these integration layer applications will be the responsibility of each certified GM DSP (ADP, R+R, EDS, UCS, ADAM, etc.). I don't think that this activity should cost a dealer more than they are paying today, as all DSP's are required to continually write interfaces to OEM applications such as DCS, GM Access, etc. I don't know however if R+R or GM will be charging additional fees for this level of integration, only time will tell.

In terms of impact on EDS, this announcement although interesting does not change our business model in this one area of our business. We develop and design solutions for dealers representing dozens of makes and franchises. In many ways we have a great deal of insight into the arena that R+R is about to step into as we have been (and continue to be) a major IT provider to GM for many years. Over the past several years (since EDS' spin-off from GM in 1996) we have actively been working with other OEM's (Toyota, Lexus, DCX, Ford, etc.) to broaden our solution set and offerings for dealers. GM stated in our conference call that they are fully supportive of having multiple certified DSP's serving their dealer community, and this has been an important point from both their national dealer council and GM Management.

In terms of on-line appointments, we marketed tested a solution two years ago at NADA and received very mixed results. The biggest issue from our perspective is that on-line appointments need to give the customer a full view of your shop load, not just email capability to a service advisor. In order to do that, the shop needs to be running some type of scheduling and dispatching system and needs to use it - religously. Our research shows that the majority of stores are not using this type of system and many of the ones that do override many of the features, constantly. Thus, for most dealers this type of solution is not effective. We do however keep evaluating the marketspace to determine when this type of system is viable.

Hope this answers your questions.

[This message has been edited by Matt Parsons (edited 06-01-2000).]