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Automakers rev up parts portal

DaimlerChrysler, Ford Motor and General Motors join forces once again, this time to create a Web portal company that links auto dealers with their repair shops over the Web.

Auto giants DaimlerChrysler, Ford Motor and General Motors on Thursday teamed up once again, this time to create a Web portal company that links auto dealers with their repair shops over the Web.

The new company, which has yet to be named, will provide technology, services and a Web portal that will connect auto dealers to the auto-body shops that buy their repair parts. The total market for repair parts is estimated to be worth between $100 billion and $120 billion, the companies said during a press conference.

An Internet tune-up could do the auto-parts business some good. Roughly 60 percent to 70 percent of all parts orders that come out of the market are inaccurate, according to industry estimates. These inaccuracies lead to supplemental orders, which translate to a delay in service and a greater cost to consumers.

Executives from the Big Three automakers said the new company, which is expected to be in full swing by the beginning of the second quarter, will try to automate and streamline the ordering process between auto-parts dealers and the auto-body repair shops. The technology and services will be built around a Web portal, which is now in a pilot program.

The company's revenues will be driven by subscription and transaction fees.

Daimler, Ford and GM are locked in another Internet venture known as Covisint, an online marketplace expected to simplify the vast amounts of paperwork and time the automakers spend on purchasing orders.

Covisint, which is expected to handle several hundred million dollars per year in purchasing, is one of the more high-profile examples of a slew of initiatives by automakers to harness the power of the Internet.

All automakers are scrambling to move their businesses online to improve communications, cut costs and streamline business among their old-line network of parts makers, buyers, dealers and other key players. Other carmakers including Toyota and Volkswagen have also tapped into the world of online exchanges and Web sites in an attempt to get a competitive edge.

Daimler, Ford and GM, along with carmakers Renault and Nissan and technology partners Commerce One and Oracle, provided all of the start-up funds for Covisint. The venture, which has faced government scrutiny and its share of technical challenges, is still hunting for a chief executive officer.

The venture announced see special report: Head-on collisiontoday will be based initially in Richfield, Ohio, and will employ about 50 to 60 workers. Bell & Howell, a maker of electronic catalog technology for the auto-parts industry, will be the lead technology and integration services provider for the venture. Executives said more technology partners are expected to join the venture as it moves forward.

Chuck Rotuno, formerly general manager of global automotive publishing at Bell & Howell, will be the chief executive of the new venture.

The new company is different from the dozens of dot-coms that have popped up targeting the auto-parts market, according to John Smith, GM's vice president of service parts operations.

"These players have resources and their respective existing dealer and customer bases to assure success," Smith said.

The company also has "the bricks to go along with the clicks," he said. Its resources include the original equipment parts, related catalog and service information, and an international dealer network, he said.