Seeking Hidden Treasure? Look Under the Hood

Automakers like Ford and Volvo take steps to boost their parts and service operations


In the fall of 2005, Ford of Europe turned to Enigma's software to roll out a browser-based electronic parts catalog — called "FordEcat" in more than 42 countries in Europe and the Middle East. Also available in 17 different languages, the "FordEcat" enables technicians to receive up-to-date information on parts and service for 45 different car models. In less than one year, more than 65 percent of its dealer network in Europe and the Middle East has chosen the "FordEcat" system, solidifying Ford's aftermarket revenue stream and establishing centralized management of service and support content.

In the spring of 2006, Ford North America went live with the Ford Catalog Advantage (FCA), also based on Enigma. FCA, which is a Ford product offering, delivers critical parts information for all Ford and Lincoln Mercury vehicles to the parts managers at 4,500 dealers throughout the US. FCA integrates to the major dealer management systems (DMS) in use in North America, ensuring that parts decisions are being made on accurate and up-to-date information. The positive response from the dealer community is validated by the fact that in less than one year almost 50 percent of dealerships are subscribing to the new FCA offering.

And while the deployments at Volvo and Ford continue to ramp up, each one represents a significant head start on their automotive competitors. In the past, many companies, including automakers, focused on product-based revenue rather than spare parts and services. But that trend is changing. According to a September 2005 report from the Aberdeen Group one of the main market pressures driving automakers and other OEMs to increase their service-based revenue is the shrinking profit margin of product sales.

Given the current economic environment, the automotive industry is now diversifying its approach to increasing revenue and profits. By implementing new technology, OEMs can improve the financial picture by optimizing the delivery of service and parts for the vehicles they manufacture. In an age when automakers need to enhance post-sales revenues, that's both a competitive differentiator and an opportunity for growth.

About the Author: John Snow is the vice president of marketing and business development for Enigma, an aftermarket service and support technology company.

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