Ford, Microsoft team up in Internet car deal

By: Drivers.com staff

Date: Saturday, 17. January 2009

It is estimated that at least one-quarter of new car buyers in the U.S. use the Internet at some stage in the purchasing process, although only a small proportion actually clinch the purchase right there and then on the Web.

And while the frustrating process of combing through the classified ads and haggling with dealers is far from over, it has taken a major step in the direction of online purchasing with the announcement in San Francisco that Ford Motor Company will team up with Microsoft Corp. to become the first partner in a proposed joint venture with CarPoint to enable consumers to design and order the car they want.

Ford President and CEO Jac Nasser and Microsoft President Steve Ballmer said the new venture will transform the way consumers buy cars on the Internet.

Ford and Microsoft also announced they are developing the first online Build-to-Order system to link consumer order configurations directly with automotive manufacturers' supply and delivery systems.

This will allow consumers to order any model of car to their exact specifications on CarPoint, Ford.com and other automotive destination sites, receive immediate feedback on availability, and schedule delivery and service at their local dealership.

"Microsoft and Ford share a vision that buying the exact car you want can be simple, fun and efficient," Ballmer said. "CarPoint is going to change the way cars are bought and sold with technology that brings together manufacturers and dealers to deliver the services and cars that consumers want."

"The consumer is driving a revolution in automotive retailing, and Ford intends to be at the forefront of that revolution," Nasser said. "We share Microsoft's consumer focus and believe that this joint venture will lead to enhanced car-buying and customer experience, helping to build a more positive relationship between consumers and dealers."

The new CarPoint entity will bring together Microsoft, Ford, and other key leaders in the automotive industry in a joint venture. Microsoft will hold the majority stake. The joint venture aims to provide opportunities to manufacturers and dealers in the automotive industry by offering consumers an open online marketplace where they can find the exact car they want.

CarPoint has a history of successful business relationships. For example, through its relationship with Reynolds and Reynolds Co. (NYSE: REY), CarPoint has built a successful channel with more than 3,500 dealers that participate in the CarPoint New Car Buying Service and the Used Car Marketplace. Reynolds and Reynolds will continue to work with CarPoint to deliver on the vision of providing consumers with a better car-buying experience.

With the planned creation of the online Build-to-Order system, manufacturers will also be able to build strong relationships with consumers by offering greater access to pre- or custom-built cars, which will then be delivered through a dealership.

Providing consumers with build-to-order cars

The planned Build-to-Order system will combine existing CarPoint car-buying, shopping and ownership tools with a service that allows consumers to configure and order the car they really want. Once a consumer has decided which car is right for him or her, CarPoint technology will locate an existing car, whether it is on a dealer's lot or on a transporter headed across country, or will place an order for a new custom car to be built at the factory and delivered through the consumer's local dealership.

The Build-to-Order System will provide consumers with access to real-time information throughout the buying process, including vehicle availability, anticipated delivery schedules and notification of delivery plans. The technology will also enable manufacturers and dealers to get instant, simultaneous online views of the status of the order until the car makes it into the hands of consumers.

Key technologies in new online automotive marketplace

With Ford, the new CarPoint plans to feature the automotive industry's first online Build-to-Order system that links Internet car-ordering services to the back-end systems of an automotive manufacturer. This will allow companies such as Ford to better manage the order-fulfillment process, streamlining production and inventory management through the supply chain.

The underlying technology for integrating CarPoint systems with manufacturer and dealer systems to provide Build-to-Order capabilities will include the Microsoft Windows 2000 operating system, Microsoft SQL Server 7.0, and the BizTalk Server for XML-based business-to-business e-commerce.

Another example of CarPoint technology is DealerPoint, an online system designed to help dealers manage and quickly respond to Internet prospects, reduce dealership lot time, and monitor online sales performance. DealerPoint technology will be licensed to Ford Motor Co. dealerships.

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