Reynolds and Reynolds Acquires Networkcar

Dayton, Ohio-based Reynolds and Reynolds, a provider of learning and consulting services and CRM solutions to automotive retailers, is expanding its offerings by acquiring a small company that specializes in telematics for vehicles. Reynolds, which serves more than 20,000 customers and nearly 90 percent of all North American automotive retailers and car companies, announced Monday it would up its 10 percent minority stake in Networkcar Inc., and purchase the privately held San Diego-based company. The $12 million cash deal makes Networkcar a wholly owned subsidiary of Reynolds and Reynolds. Networkcar CEO Charles Myers is leaving the company and will be succeeded by Reynolds executive Dave Dutch. The 19-person Networkcar team is staying with the company. Networkcar uses a wireless device to collect and deliver real-time automotive diagnostic data and satellite-based global location services to car retailers, vehicle owners, car fleets, and other users of vehicle data. Customers pay a one-time fee for the device (which can range from $900 to $1,600) along with a $9 per month service fee. They can access their own vehicle information via a private Web site. Because customers pay for the service, Dutch says drivers are aware of the service and its tracking capabilities, and so far there have not been any privacy issues. Networkcar has not been sold to rental car companies thus far. Reynolds plans to incorporate the Networkcar's CAReader as part of the company's integrated CRM suite of solutions that helps automotive retailers and car companies leverage information, strengthen relationships with consumers and improve operational efficiencies. Currently, the Networkcar CAReader solution is a component of the Reynolds Generations Series, which encompasses more than 100 applications and services relating to all aspects of dealership operations, including Web services, contact management, sales management, finance and insurance, service and parts operations, document management, and business and employee management. Dutch says Networkcar's products are a good fit as Reynolds makes an aggressive push into the CRM space, because they help tie the dealership to customers and their cars. Using the system dealers can send email that the car is scheduled for maintenance; offer remote emissions testing, and using the global positioning system to locate stolen vehicles. Reynolds and Reynolds officials expect that for retailers, installation of a CAReader into a customer's vehicle is a boon for the service department. Reports show that more than half of CAReader users return to the dealership where they purchased the car and device for service when notified of a problem. That's up from just 23 percent who normally return for service. Dutch says the products from Networkcar differ from the current crop of onboard emergency auto services that offer roadside assistance and in-car voice systems that give directions, by linking the dealer directly to the customer, rather than to the vehicle manufacturer. The CAReader is compatible with nearly all vehicles manufactured since 1996--more than 80 million cars.