Woods & Seaton. The new Woods & Seaton Analysis

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1 The new Analysis International Automotive Retailing Strategies Vehicle Manufacturers Dealers & Groups Dealer System Providers 29. May 2017 Analysis Contents, Service Package & Prices

2 International Automotive Retailing - Strategies Page 2 May 2017 International Automotive Retailing - Strategies This new Analysis covers the IT status and strategies of... Vehicle Manufacturers Dealers & Groups DMS & Specialist System Providers in Europe and North America, with views of other regions, plus... Appendices covering two topics of current and future importance... Appx.1. Data and System Integrations - critical factors in Retail performance Appx.2. Cox Automotive - the challenger for the leading role in global This Analysis is part of a Services & Information package which includes... 1: The Analysis refers to earlier Briefings, Reviews & Analyses relating to the topics covered. These are available to Subscribers on request. 2: Subscribers are welcome to raise questions and to discuss the contents of the Analysis with its authors, via Telephone, or Skype. 3: Subscribers will receive further Briefings & Reviews published by during This Analysis is a live document, with updates and open access to the authors Purpose has delivered Briefings & Reviews covering developments in international for the 3 years since our paid Subscription service ended - after 25 years - in April These developments have changed and complicated the marketplace and we became aware of a demand for a comprehensive Analysis providing a clear picture of the evolving international situation. Our most recent openly published Analysis of International was delivered to Subscribers in A complete rewrite has been necessary to produce this new Analysis. Although it has not been possible to cover details of every global market, our objective has been to provide a uniquely valuable guide for... Car and Truck Manufacturers (OEMs) for planning and managing international strategies, including their relationships with Dealers and Dealer System Providers (DSPs). Dealer System Providers (DSPs) for planning and managing strategies in existing and potential markets. Other current and intending Participants in Automotive Retailing who need to understand the many players and the relationships between them for planning and managing their own activities. For newcomers wanting to understand, participate or invest in the business - this Analysis is an essential guide. The Introduction to the Analysis and its Contents List are included in the following pages, together with prices. 2017

3 International Automotive Retailing - Strategies Page 3 Introduction to the Analysis Automotive Retailing and in 2017 still show many traces of strategies, particularly those of OEMs, which were originally defined at the turn of the century when that dramatic nonevent stimulated urgent and intensive reviews of how to handle the future marketplace. As described in Section 1. later, Automotive Retailing has changed dramatically since 2000, to a format not foreseen at that time, the main causes having been... Changes in the structure of OEMs Dealer Networks, especially the impact of... Growth in size and influence of multi-brand Dealer Groups - some of them multi-national... Consumer use of mobile-internet technology and on-line information and... Customer and prospect expectations of immediate, precise information in all business areas. Together these have had a major impact on the IT requirements of Dealers and OEMs. One result was that the strategies of OEMs became outdated and they have needed - sometimes reluctantly - to accept the new realities and revise their strategies to support the evolving international marketplace. The following Analysis provides information based on 40+ years of close independent involvement in international, researching at ground level the situations of Dealers, Groups, OEMs, Finance Companies and the wide variety of DSPs - i.e. the DMS and Specialist Systems Providers. It has 7 sections and 2 Appendices The International marketplace which needs to support This section deals with how has needed to evolve to support the rapidly changing Automotive Retailing environment and the implications for all participants, particularly OEMs, Dealers and DSPs. 1. Changes in Automotive Retailing and its IT requirements since Trends in the Automotive Retailing environment which have had an impact on Dealers IT needs and decisions, and the ability of OEMs to influence these decisions. 3. Impact of the Trends on the participants in. 2. Regional variations in OEM influence in, covering North America and the main countries in Europe. Some information about other markets is included, e.g. Australia. More is available on request. 2. The main differences in the environment between geographic regions, particularly USA v Europe, plus high level views of others, including South America and Asia-Pacific. 3. Multi-national DMS providers - their characters, products, strategies and geographic coverage 1. Reviews of the three nominally Global but very different large-scale DSPs - CDK Global, Cox Automotive and Reynolds & Reynolds. 2. Reviews of the many smaller but significant multi-national DSPs in international markets. Note: The size of a DSPs customer base is not the most important factor in their influence in the marketplace. A related topic is whether they are a desirable counter-balance to any tendencies of Global DSPs to take advantage of their dominance in some markets. 4. Markets by Country - Dealers, Groups and National DMS providers 1. A view of the Dealers and Groups in North America and major European markets. 2. The DMS providers operating in these markets including multi-national and national. 2017

4 International Automotive Retailing - Strategies Page 4 5. Overview of Specialist 3rd party Retail Applications 1. The roles of Specialist DSPs in the various Markets. 2. A view of DSPs specialising in add-on CRM, Sales, Service Appointment systems, Web sites etc., their process support and market coverage. Note: Cox Automotive also operates in this category. 3. An introduction to Specialists with DSP Integration Support Systems. 6. OEM strategies for DMS and other retail applications 1. Views of the strategies of BMW, Mercedes-Benz, VW Audi, Porsche, Toyota-Lexus, Ford, GM-Opel, Jaguar-Land Rover, Volvo Car, PSA, Renault, Nissan, Kia & Hyundai. 2. Assessments of the results of their strategies. 7. Conclusions - Key points about a very complex marketplace Appendix 1. Data and Integrations 4-way relationships more important - and complex - than the IT *** Note on current legal activity in the USA *** At the time of writing, one of the issues relating to Data Exchanges in the USA has become prominent. Two Specialist DSPs, MVSC and Authenticom, have launched separate but similar lawsuits claiming that CDK Global and Reynolds & Reynolds have jointly acted in an anti-competitive way to force them - and other Specialists - out of business. Both are using a law firm which specialises in anti-trust claims. CDK and R&R are disputing the claims very strongly, and a bitter contest is expected. The result will be important for the market. Appendix 2. Cox Automotive Inc. The emerging challenger for the leading role in global The complex global environment which is clarified in the Analysis Customers Mobile & On-line OEMs & NSCs Dealer System Providers (DSP) The Global Environment Dealers & Groups Sales Service Customers

5 International Automotive Retailing - Strategies Page 5 44 Years Specialists Dealer init International Automotive Retailing Strategies 29. May 2017 Contents - 1 Purpose of this Analysis 1 Introduction 2 1. The International marketplace which needs to support Changes in Automotive Retailing and its IT requirements since Figure 1a. Overview of the Environment in Figure 1b. Modern Car or Truck Environment in Trends in the Automotive Retailing environment which have had an impact on... Dealers IT requirements and decisions, and on... The ability of OEMs to influence these decisions Transformation of Dealer Networks Centralisation of Administration and IT Widening range of applications to be covered Arrival of intruder 3rd parties positioned between consumers and Dealers/OEMs Consumer use of mobile-internet technology for doing business 7 Figure 2. OEM and situation 8 Figure 3. Participants in Automotive Retailing and their Relationships Consumer use of Social Media sites Increasing consumer expectations of fast - immediate - responses Changes in the DSP sector OEM direct sales and control of the Sales Process Increasingly protective/restrictive Legislation Impact of Trends on the Participants in Regional variations in OEM influence over Country situations Differences in the environment between geographic regions Ability of OEMs to influence the IT which their Dealers use Availability of DSPs to fulfil OEMs standardisation objectives Conclusions on OEM influence DMS providers - Their characters, products, strategies & coverage Categorisation Geographic segmentation Size and coverage Market perceptions and realities Three major DSPs - One-Stop-Shops CDK Global Overview CDK s Geographic distribution - wide differences in products and market shares Region and Country positions Conclusion on CDK Global

6 International Automotive Retailing - Strategies Page 6 44 Years Specialists Dealer in IT International Automotive Retailing - Strategies Contents Reynolds & Reynolds Overview Geographic distribution - differences in products and market shares Conclusion on Reynolds & Reynolds Cox Automotive (CA) Overview Geographic distribution - differences in products and market shares North American DMS International DMS incadea in Europe - individual country positions Approach to the International markets Cox Automotive is also a Specialist DSP Conclusion on Cox Automotive Multi-national DMS Providers who are not One-Stop-Shops Smaller-scale Multi-National DSPs North America International Automotive Solutions Centre (Switzerland & Germany) Datafirst (France) Freicon (Germany) i'car (France) Vector (Austria) Pinewood Technologies (UK) Quiter (Spain) Lidera Soluciones (Spain) 31 Three Multi-national DSPs based in Australia Pentana Solutions Auto-IT Titan Autologica (Argentina) Audev (Netherlands) Conclusion on smaller-scale multi-national DMS providers 35 DSP Tables Multi-National DMS Providers operating in more than one Region 36 International DMS & Specialist System Providers operating in more than one Region European Markets - Groups, Dealers and DMS Providers Trends in Dealer numbers in Europe Market Performance Market Structures OEM Owned Retail Branches (Subsidiaries) ly-owned Sub-Dealers and Service Agents (Workshops) ly-owned Dealer Groups - usually multi-brand 41 ICDP s Top 50 European Dealer Groups Many variations Groups as targets for DSPs

7 International Automotive Retailing - Strategies Page 7 44 Years Specialists Dealer init International Automotive Retailing - Strategies Contents Germany Overview of the German Dealer environment German Dealer Groups 44 Dealer Group Tables Germany - Top 5 DSPs including Nationals 50 Other DSPs in Germany 50 CDK - German specifics 50 incadea - German specifics Betzemeier - one of the Top Germany - other DSPs 51 Table: DMS providers in Germany The competitive situation Loco-Soft - A particularly interesting smaller DSP 53 Table: DMS providers operating in Germany 54 Table: Specialist DSPs - National & Multi-National - operating in Germany France Overview of the French Dealer environment French Dealer Groups PGA - multi-brand Dealer Group DSPs used by other French Groups 58 Tables: French Dealer Groups France - Top 5 DSPs including Nationals 62 CDK - French specifics 63 PSA & Reynolds & Reynolds 63 i Car Systems Comment on DMS Providers France 65 Table: DMS providers in France 65 Table: Specialist DSPs in France Italy Overview of the Italian Dealer environment Italian Dealer Groups 67 Table: Italy - Top Groups Italy - Top 5 DSPs including Nationals 72 OEMs as DSPs CDK in Italy Global - Datafirst 73 Global - GNS Piemonte Esseitalia (Pentana) Visual Software Other DSPs operating in Italy 75 Table: DMS providers operating in Italy 75 Table: Specialist DSPs operating in Italy Spain & Portugal - Iberia Overview of the Iberian Dealer environment Central and South American connections

8 International Automotive Retailing - Strategies Page 8 44 Years Specialists Dealer in IT International Automotive Retailing - Strategies Contents Dealer Associations Dealer Groups Portugal 78 Table: Portuguese & Spanish Groups in Euro Top Spain Iberia - Spain and Portugal - Top 7 DSPs including Nationals Serinfer Servicios Informáticos Table: DSPs operating in Iberia Belgium Overview of the Belgian Automotive Retailing environment Dealer Groups Top 5 DSPs operating in Belgium Xpower 89 Table: DMS & Specialist DSPs operating in Belgium Other DSPs operating in Belgium The Netherlands Overview of the Dutch Automotive Retailing environment Dealer Groups 90 Table: Dutch Groups in Euro Top The Top 5 DSPs operating in The Netherlands 92 Table: DMS & Specialist DSPs operating in The Netherlands Austria Overview of the Austrian environment Dealer Groups Wolfgang Denzel Pappas Gruppe AVAG VW Family of Brands Top DSPs operating in Austria Vector and Motiondata Porsche Informatik Other DSPs operating in Austria 99 Table: DMS & Specialist DSPs operating in Austria Switzerland Overview of the Swiss environment Dealer Groups 101 Table: Swiss Groups in Euro Top The Top 5 DSPs in Switzerland Other DSPs operating in Switzerland 104 Table: DMS & Specialist DSPs operating in Switzerland Poland Overview of the Polish environment Dealer Groups The Top 5 DSPs in Poland Other DSPs operating in Poland 107 Table: DMS & Specialist DSPs operating in Poland

9 International Automotive Retailing - Strategies Page 9 44 Years Specialists Dealer in IT International Automotive Retailing - Strategies Contents The UK Overview of The UK s environment Market Statistics - a high level view 108 Table: UK Groups in European Top in the UK DMS in the UK Specialist systems in the UK The competitive environment and participants in Market requirements The UK - Top 5 DSPs including Nationals 113 Figure 4. - Overview of the UK environment - DSP presence in each Application CDK in the UK Pinewood in the UK Reynolds & Reynolds in the UK Tables: DMS & Specialist DSPs operating in The UK The USA Overview of Automotive Retailing in the USA The Top 5 DMS Providers in the USA A note on Canada National DSPs and the Top Table: DMS providers in the USA Autosoft and Auto/Mate Specialist DSPs in the USA Overview of 3rd Party Specialist Retail Applications Multiple layers of 126 Figure 5. The DMS continues to be the core system and primary database 126 Figure 6. Integration and Data requirements for an on-line or Showroom Sales Process 127 Figure 7. Integration and Data requirements for an on-line or Reception Service Process Geographic segmentation of Specialist DSPs 128 Figure 8. Data Flows and Integrations in Automotive Retailing Specialist applications at the detailed level 131 Applications in the Vehicle Sales environment 131 Applications in the Vehicle Service environment Data Integration Specialists Other Specialist areas Comment on Specialist applications Specialist DSPs CDK, Cox Automotive and R&R as multi-national Specialists Multi-national Specialists National Specialists 136 Tables: Specialist DSPs - 9 pages OEM strategies for DMS and other retail applications 146 Insights into their strategies for DMS and other retail applications Overview of OEMs experiences to-date

10 International Automotive Retailing - Strategies Page 10 Specialists in International Automotive Retailing - Strategies Contents Causes of OEM dissatisfaction and low success levels with Individual OEM situations BMW Mercedes-Benz Volkswagen-Audi Porsche Toyota-Lexus Jaguar-Land Rover Volvo Car Ford 155 Figure 9. Ford in China - incadea Connect - Microsoft Azure Integrations & Data Exchange General Motors (including Opel-Vauxhall - in process of being sold to PSA) Future strategy of GM s Opel-Vauxhall is now uncertain PSA - Citroën, DS, Peugeot Future strategy after acquiring Opel-Vauxhall Renault (Part of the Renault-Nissan Alliance) Nissan (Part of the Renault-Nissan Alliance) Hyundai and Kia Conclusions - Key points about a very complex marketplace 164 Appendix 1 - Data & Integrations - 4-way relationships more complex - than the IT Overview of Data in Vehicle Sales & Service 165 Figure 1. Data and Data Flows in Automotive Retailing Data at points-of-contact with Customers Multiple sources of Data Dealers as sources of TART Data Data flows and DSPs 169 Figure 2. Data requirements for an on-line Sales Process 169 Figure 3. Data requirements for Service Processes The role of DSPs Five Categories of Data Six Categories of Participants Concerns and sensitivities of the Participants - and legalities Practicalities of organising Data exchanges between Participants Conclusions 179 Appendix 2 - Part 1. Cox Automotive - Review of global operations after page 180 The emerging challenger for the leading role in global 1 1. Introduction 1 2. Two different viewpoints 1 3. Open Integrations - a potential differentiator 1 4. Initial overview of Cox Automotive 2 5. Cox Enterprises venture into becoming a DSP A background of surprises

11 International Automotive Retailing - Strategies Page Years Specialists Dealer in IT International Automotive Retailing - Strategies Contents The evolution process 3 Figure 1. Organisation structure incl. acquired Specialist DSPs within AutoTrader Group 4 Figure 2. Cox Automotive - Organisation/Product structure - incl. International Figure 3. Dealertrack Technologies - High-level Organisation/Product structure Figure 4. Cox Automotive - High-level Organisation/Product structure Cox Automotive in more detail Position in the market Current main differences between their business compositions 6 Figure 6. Business composition - estimated % of Revenues Different Strategies CA s Product-line The overall picture CA in the DMS sector 8 Figure 6a. Cox Automotive Applications & Services - USA CA in the Specialist DSP sector Summary and Conclusions 13 Appendix 2 - Part 2. incadea s entry into the UK market 1. Cox Automotive takes incadea, Modix & Xtime into the UK creating the closest approach to-date to being a UK One-stop-Shop 1 Figure 1.a. The Manheim organisation UK - as recorded in Review No Figure 1.b. The Cox Automotive organisation - UK CA UK in two DSP categories Policy of Open Integrations incadea s DMS A modern ERP platform 4 Figure 2. incadea s my.engine - tailoring for individual Role Initial conclusions 5 Appendix 3. A significant current development... CDK has started the process of acquiring Auto/Mate - a serious competitor Definition of The term covers the range of systems purchased and used by Car and Truck Dealers, including DMS, CRM, Web sites, Relationship Management and more, plus their Data integrations with 3rd Parties including Finance & Insurance Companies, Data providers and Marketing Services. From an OEM s viewpoint, can be described as the two-way Chain of Systems and Data which connects them to their Dealers and Customers, and their Customers via Dealers to them... as indicated in the graphic below. Dealer Sales Service Dealer System Providers Data from Dealers Data from OEMs OEM 2017

12 International Automotive Retailing - Strategies Page Years Specialists Dealer init Dealer Sales Service Dealer System Providers Data from Dealers Data from OEMs OEM International Automotive Retailing - Strategies Price for the Analysis together with the Additional Services & Information package including... 1: In this Analysis and its two Appendices, reference is made to various earlier Briefings, Reviews & Analyses related to the topics covered. These are available to Subscribers on request. 2: Subscribers are welcome to raise questions and to discuss its contents with its authors, via Telephone, or Skype. This service is available for a period of 3 months after purchase. 3: Subscribers will receive the further Briefings & Reviews published by during These will cover market developments and update the Analysis. The Analysis and other documents are delivered electronically as PDF files. Package Price Euro: 3, US $: 3, AU $: 4, UK : 2, Other currencies can be quoted on request. Tailored versions of the Analysis for use within individual organisations can be provided on request. To order or raise questions about the Package, please contact... Information Service Mike Seaton or Jo Seaton addresses mikeseaton@woods-seaton.com joseaton@woods-seaton.com Telephone: 44 (0) Office address Wash Hill House, Wooburn Green, Buckinghamshire, HP10 0JA, England. 2017