Automotive News - March 10, 2008 - (Page 4)

4 • MARCH 10, 2008 Suddenly, Arkona’s a key software player DealerTrack union gives it access to clients, resources Ralph Kisiel rkisiel@crain.com A year ago, Arkona Inc. was just a bit player in a field of auto dealership management system companies dominated by two behemoths. Then, in June, DealerTrack Holdings Inc. bought Arkona for $58.9 million. Since then, Arkona’s growth has picked up. It is poised to become a significant player, for three reasons: 1. The takeover gave Arkona immediate legitimacy, access to DealerTrack’s larger user base and deep pockets to support its expansion. 2. On April 1, the two brands will share DealerTrack’s Web site and offer integrated products. 3. Arkona offers an open IT system, allowing dealers to combine it with other systems in ways that the two giants’ closed systems don’t. DealerTrack is used by 22,000 newand used-car dealers to submit credit applications and electronic contracts to lenders. It also offers other finance and insurance products. Before the takeover, Arkona had about 650 dealership customers for its Web-based dealership management system, software necessary for dealers to run their business. It now has about 1,000. It is adding as many as 25 dealerships a month. Arkona pumps up Arkona’s Rich Holland: “A number of very large billion-dollar operations (are) running Arkona.” puter Systems Inc. Last year, Universal acquired Reynolds and took the Reynolds name. Reynolds and ADP are the two giants of the industry. Starting April 1, Arkona and DealerTrack will offer their combined services through one Web site, dealertrack.com, a key goal of the acquisition. Dealers now access Arkona and DealerTrack on separate Web addresses. The Arkona dealership management system will be integrated with DealerTrack products. For example, dealers no longer will have to manually rekey data from an Arkona system into a DealerTrack product. “We’re not selling the DMS anyArkona, a vendor of dealer management systems, is growing in part because of backing from DealerTrack. Here are 3 factors fueling its expansion. 1. DealerTrack’s large user base gave Arkona added credibility. 2. Arkona and DealerTrack will integrate platforms on April 1. 3. Open systems — Arkona’s approach — will be pushed by new-entrant Microsoft. more. We’re selling a platform that’s totally integrated,” says Raj Sundaram, senior vice president of DealerTrack’s dealer solutions group. “From a dealer work-flow standpoint, once they log onto Arkona, they’re already logged onto DealerTrack.” that vendor. So far, 115 vendors have completed Reynolds’ rigorous certification program. An additional 20 are in the final stage of certification. Microsoft Corp. soon will join Arkona in touting the merits of open systems. Microsoft will test its own open dealership management system this year with about 100 dealerships. Arkona and DealerTrack welcome the new competitor. “If they do come, I think it’s going to be great,” says Sundaram, “because I think finally it starts to give the dealers a sense of there are alternatives out there.” c Boost from Asbury In October, Arkona got a huge lift. Asbury Automotive Group, the sixthlargest U.S. dealership group, switched its 93 dealerships from three other systems to Arkona’s. “That’s a significant endorsement, but we also have a number of very large billion-dollar operations running Arkona” as their dealer management system, says Rich Holland, Arkona general manager. Asbury’s dealerships have been using systems from ADP Dealer Services, Reynolds and Reynolds Co. and the former Universal Com- Open system Even as an integrated platform, Arkona will remain an open system that gives dealers the option to use other software. In contrast, Reynolds sells a closed system. Dealers with a Reynolds system can use a third-party software vendor, but Reynolds must certify Chrysler may build vehicles in Russia Rick Kranz rkranz@crain.com PHILIP MEECH ■ Family honor GENEVA — Chrysler LLC aims to double vehicle sales outside North America by 2012 with help from an assembly plant in Russia. Chrysler is negotiating with at least two automakers to build vehicles there and wants to make a deal this year. Last year, Chrysler sold 238,000 vehicles outside the United States, Canada and Mexico. It sold 5,636 vehicles in Russia last year, up 40.2 percent from 2006. “I would not rule out going into Russia and installing our own manufacturing facility or our own capacity,” said Mike Manley, Chrysler’s head of sales, marketing and business development. But the preferred choice is to “find a partner that has excess capacity or is looking for a partner.” “We are talking with some potential people,” said Manley, who was interChrysler’s Mike viewed at the Geneva auto show. Manley: Suppliers Russia’s auto sales are booming and are “developing so are its auto suppliers. tremendously.” “The supplier base in Russia is developing tremendously,” Manley said. “The more manufacturers that are localized, the quicker you can get your production up and running. The time horizon I’m looking at for localization would be over the next two to four years.” Manley did not name models but said vehicles the size of the Chrysler Sebring, Dodge Caliber or smaller would be assembled in the plant. He also said vehicle decisions are being made from a global sales perspective. Models might be dropped from the United States but sell outside North America. For example, despite talk that the Jeep Compass could be dropped in the United States, the small crossover sells well in Italy. The Jeep Liberty SUV is Chrysler’s top seller outside North America. Next year, Manley expects the new Dodge Journey crossover to be the No. 1 seller. Manley expects sales outside of the NAFTA region to double in about four years. Chrysler has about 1,600 dealers outside North America and wants to boost that by 15 to 18 percent this year. The main regions targeted are China and countries in Asia, eastern Europe and Latin America. c Bradford Wernle contributed to this report Italian design and engineering legend Sergio Pininfarina, center, was one of four inductees into the European Automotive Hall of Fame last week in Geneva. Pininfarina, 81, is flanked by his daughter, Lorenza Pininfarina, and son, Andrea Pininfarina. Also inducted were Jacques Calvet, chairman of PSAPeugeot/Citroen from 1990 until 1997; Dante Giacosa, longtime head of design and engineering at Fiat; and the Opel brothers, the family that built the German automaker of the same name. The European Automotive Hall of Fame is sponsored by Automotive News Europe. Congress may ban mandated arbitration Bill would end required mediation between dealers and customers Harry Stoffer hstoffer@crain.com WASHINGTON — Auto dealers celebrated a lobbying victory in 2002 when they got Congress and President Bush to ban mandatory binding arbitration of disputes arising from their franchise agreements with automakers. Now comes the hangover. Spurred by consumer groups, lawmakers have introduced a bill that would prohibit dealers from requiring customers to accept binding arbitration to settle disagreements over sales or lease deals. “This legislation would connect the chain from manufacturers to dealers and from dealers to consumers,” Rep. Linda Sanchez, D-Calif., said when she introduced the bill last month. Sanchez heads the House Judiciary Committee’s subcommittee on commercial and administrative law. At a hearing on the bill last week held by the subcommittee, Erika Rice of Arcanum, Ohio, testified that she is still fighting a Toyota dealership that sold her a 2002 Volkswagen New Beetle in 2006. It turned out to be a rebuilt wreck, she said. Perhaps without the protection of mandatory arbitration, she said, the dealership “would have treated me right in the first place.” Sanchez told Automotive News she wants to move the bill soon but does not have a timetable. Rep. Chris Cannon of Utah, the ranking Republican on the subcommittee, said changing federal law because some businesspeople mistreat customers could be more costly to consumers in the long run. Many consumer groups want to ban mandatory binding arbitration in transactions and contracts by all kinds of businesses. They say most people don’t realize they are giving up their rights to sue when they sign such contracts. Other proposed bills would impose that broader ban. But “a piecemeal strategy” may be needed to reach that goal, said David Arkush, director of Congress Watch, a division of the consumer group Public Citizen. If dealer lobbyists “sit this one out” and the bill prohibiting mandatory arbitration in vehicle contracts becomes law, a broad ban may be easier to achieve, Arkush said. The National Automobile Dealers Association is neutral on the Sanchez bill, said David Hyatt, the association’s chief public affairs officer. NADA considered passage of the ban on automaker-mandated arbitration “critical” to the well-being of the franchise system, he said. To oppose the latest bill would be “inconsistent,” he added. The American International Automobile Dealers Association, which represents import-brand dealers, opposes the bill. AIADA President Cody Lusk said the bill would further burden “our already-overwhelmed legal system.” Proponents of arbitration say it is a better way than litigation to settle disputes. Arbitration saves time and money and bases decisions on factual criteria instead of emotional courtroom arguments, advocates say. Even if Sanchez’s bill becomes law, a dealer and a customer could agree voluntarily to arbitration of disputes. Industry officials say NADA’s neutrality does not prevent state or metropolitan dealer associations from taking a position on the bill. c

Table of Contents Feed for the Digital Edition of Automotive News - March 10, 2008

Cheaper small cars are part of VW's U.S. plan Ford offers to buy back 81 stores As dollar dives, automakers juggle global strategies Jaguar-Land Rover deal will be signed within weeks GM Planworks chief leaves Jacoby cites dealer role in VW makeover Slim fast Nissan: Electric car to get here in 2010 Family honor Suddenly, Arkona's a key software player Chrysler may build vehicles in Russia Congress may ban mandated arbitration Volvo signs dealers willing to exit Breeding a hybrid? Prius could be a brand Honda adds benefits for same-sex partners Top China execs to speak at conference Manual for Challenger waits until '09 Ex-Sonic president: Gulf States raided Sonic GM, American Axle: Ties that bind Boardroom coup ousts Chamco executives False data imperil all auto financing Dealers would suffer if Calif. gets its way GM, Ford should bring Euro cars here Fresh ideas are fine, but Chrysler must be wary We need that 10% of useful inventions Safety options: Let consumers decide Tire monitors are full of problems Germany's labor setup just doesn't work Alabama adding auto jobs more slowly Engineer Banks strives to sip fuel, burn rubber Toyota Financial takes risks to aid dealers Honda captive beefs up dealer training in leasing NADA releases 2 subprime guides ADP develops e-sales brochure Credit unions' share of auto loans declines Upgraded auction ID carries a fee Dealers At hard-charging Hyundai, the plan is simple: More — now Genesis sedan's assignment: Boost image of all Hyundais Allied will supply sensing systems to Magna Haldex opens Mexico plant Behr gets Nano pact How Tupelo talked Toyota into building a plant there Infiniti FX showcases new Nissan technology Ford may consider hatchback for U.S. Audi to launch A4 sedan, wagon together BMW M3 convertible Saab hybrid concept has solar roof panels Toyota could bring tiny 4-seater to U.S. Hummer to push H3 pickup's usefulness New look for the SL Tiny Nano makes big waves GM's Opel unveils small hatchback that could become part of Saturn line Who says Americans don't want hatchbacks? 9-3 will dominate Saab marketing Lutz: Green takes greenbacks Leap year added to Feb. misery 9 U.S. Toyota executives will retire Ford gives employees $1,000 bonus Denso picks new N.A. CEO GM extends buyout offers CAW OKs TRW pact Lampert ups AutoNation stake Sagging Chrysler boosts spiffs Feb. output is up slightly Buick offers the Cadillac of caddies GM's board: The royal robe fits Fritz Be it metal or men, Geneva all about style Raising the roof (price) Italian cops bust Fiero-aris Consumer Reports' verdict on Chrysler products: Eeeee-uuw!

Automotive News - March 10, 2008

For optimal viewing of this digital publication, please enable JavaScript and then refresh the page. If you would like to try to load the digital publication without using Flash Player detection, please click here.