Competition breeds innovation in dealer systems

Posted by Motive Retail on Mar 29, 2012 2:21:05 PM

Both Nissan and Toyota Motor Sales are in the process of expanding their integration programs to work with more DSPs, as reported in Automotive News this week (ā€œNissan dealers expect DMS costs to dropā€). In both cases they will go from supporting integration with 2 DMS systems to 8, significantly expanding the choice of integrated systems for their dealer networks.

The US market has fundamentally changed in recent years to being both broader and more open. New types of systems other than traditional DMS have flourished, and these systems are important new participants in automaker integration programs. At the same time automakers are working with greater numbers of DMS providers than ever before. VWGoA was one of the first companies to open up its program back in 2004, and it was joined by others including Japanese, Korean and European imports. The key reasons for this shift have been to increase competition for DMS systems across their networks, reduce costs and respond to demands of their dealers. Nissan and Toyota have both clearly stated these objectives.

Motive has long felt that automakers should operate programs which work with any DSP that meets objective standards and wants to support the factory integrations. Competition in the dealer systems market produces better and more innovative products and lower prices. The market is more competitive today than any time in the last fifteen years. Vendors like DealerTrack, Auto/Mate and Autosoft are gaining market share and intensifying competitive pressures to the benefit of automakers and their dealers alike. Benchmark vendors like ADP and Reynolds & Reynolds improve their offferings through the acquisition of upcoming companies with new technologies.

Dealers select a new DSP only after careful consideration, and there are many factors which influence those decisions. A healthy, competitive market ensures they will have choices. Irrespective of whether or not a high percentage of Nissan or Toyota dealers adopt new systems in the next few years, they will continue to require a choice of automaker certified systems. This fact leaves automakers no option but to look for new ways to design programs and support models which can support open integration in a cost effective and easy way.

Topics: Certification, Industry Observations, Dealer Systems Integration, Volkswagen, Toyota Motor Sales, Nissan

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