Toyota, I2 Tech Partner on Online Parts Clearinghouse
Toyota Motor Sales USA and Dallas-based I2 Technologies Inc. said Wednesday that they are forming an electronic marketplace that could revolutionize the $100-billion replacement automotive parts market by transferring the paper-intensive industry to a computerized clearinghouse.
Toyota said IStarXchange, a new company that will be headquartered in the Southland, won’t directly compete against Internet-based systems that Ford Motor Co. and General Motors Corp. recently formed to cut costs associated with building cars. Toyota said its e-commerce business is designed to squeeze costs from the business of repairing older cars.
IStarXchange will have about 100 employees when it opens this spring at an undisclosed location in Southern California. Torrance-based Toyota Motor Sales described the electronic marketplace as its first e-commerce venture.
Toyota’s announcement is the latest in a string of auto-related developments involving the Internet’s ability to link parts suppliers, manufacturers and, ultimately, consumers. Ford, for example, said Wednesday that it has formed a joint venture with Trilogy Software Inc. to improve the quality of the Ford.com Web site that consumers can use to research and buy vehicles.
Analysts predicted that Toyota’s venture might eventually compete against the Ford and GM systems, which use the Internet to link vehicle manufacturers with their new-car and truck suppliers. Toyota executives maintained, though, that manufacturers and such parts distributors as the National Automotive Parts Assn. will embrace IStarXchange.
“We’re confident that, with this open system, everyone will want to participate,” Toyota Motor Sales Senior Vice President J. Davis Illingworth said.
Most replacement part searches now begin when customers bring vehicles in for service. Mechanics usually must page through print catalogs to find parts made by manufacturers and other suppliers. When parts aren’t readily available, mechanics typically use telephone calls and fax machines to track them down. That’s an increasingly cumbersome process because more than 10 million kinds of replacement parts are in use.
The central clearinghouse would allow mechanics to use the Internet to determine the location of available parts, as well as the cost and the time needed to ship them. The system also would allow repair shops to track parts once they are shipped. Toyota and I2 Technologies didn’t discuss fees, but spokesmen said the system will make economic sense for large dealerships as well as small, independent shops.
Most new-car dealerships are using proprietary e-commerce systems, but Illingworth said just 20% of smaller retail shops and garages are using the Internet to track and acquire parts. “This is one area where we think we’ll see dramatic growth,” Illingworth said. “The Internet is becoming more and more important in everyday business.”
Toyota Motor Sales will be IStarXchange’s majority shareholder, and I2 Technologies, which provides technology for business-to-business systems, will be a minority shareholder. Toyota and I2 Technologies said they will consider making an initial public stock offering.
