Big 3, Toyota Launch Network

RouteOne, a new dealer finance communications network owned by the Big Three and Toyota, has started a rollout schedule that calls for coverage of the entire U.S. by mid-2004.

The 10 members of the Southfield, MI-based network's dealer advisory board constitute the first pilot of the precedent-setting system. Next is a 30-dealership pilot in Atlanta, GA, and an expansion throughout the entire Southeast at the end of the year, followed by the Northeast in January, Western states in March, North Central in May and South Central next summer.

“Our Big Three board of directors is excited about RouteOne's prospects,” RouteOne President and CEO Michael D. Jurecki, a former executive of Ford Credit, tells Ward's Dealer Business.

“The economics of synergizing the loan and lease application process are huge, and the fact that we cover the industry is helping us add products and participating automakers and financial institutions on a steady basis.”

At first, the field organizations of GMAC and Ford Credit will function as RouteOne's sales force in the Southeast regional launch. DaimlerChrysler Services and the captive lenders of Toyota and Lexus will come aboard at a later date, as well as the first non-equity participant, the financing arms of Nissan and Infiniti.

One potential problem that RouteOne has resolved, says its chief information officer, Joel Gruber, is the ability of the participant lenders to furnish their dealers proprietary information on secure links through RouteOne without it being shared with competitors — just as they have done on dedicated hardware.

“We intend to be a dealer-focused model from Day 1,” COO Kelly Mankin declares. “There will be no cost for dealers to convert their hardware to RouteOne. As time goes on, our plan is to add major product enhancements every 120 days.”

That includes basic credit bureau access and enhanced integration with dealer management systems providers Reynolds & Reynolds, ADP and EDS.

“We have letters of intent from all four major dealer services providers, all of whom express keen interest in joining our communications network,” says Jurecki.

The list of RouteOne financial lender clients had grown to more than 20, including subprime specialists Triad and Long Beach Acceptance Corp.

RouteOne is open to regional and national banks, leasing rate specialists and “in general, to any sources of information dealers need in the course of qualifying customers for new or used-car transactions,” says Richard Seibert, vice-president for sales and new product development.

Wes Lutz, owner of Extreme Dodge-Hyundai in Jackson, MI, and chairman of NADA's information technology committee, is keenly aware of the costs and complications of singular hardware systems that captive lenders require of dealers.

“Here we are, seeking the same data two or three or four times for a deal, when one system is all we need to simplify the process and improve customer satisfaction,” says Lutz. “I never dreamed GM, Ford, DaimlerChrysler and Toyota would get together to finance this, but it's great that they have.”

GMAC, Ford Credit and DaimlerChrysler Services each own 30% of RouteOne's stock, Toyota Financial Services has the remaining 10%. Senior officers of the four owner lenders comprise RouteOne's board, with GMAC's executive vice-president for North American Operations, John Gibson, as chairman.

The other directors include Ford Credit's Chairman and CEO Greg C. Smith and Executive Vice President Rich Van Leeuwen; DC Services Vice Presidents Paul Knauss and Christopher Taravella; GMAC Sales and E-commerce Vice President Jim Nelson; and Toyota Financial Services President and CEO George Borst.

Besides Lutz, members of RouteOne's dealer board include Jon Agresta, Agresta Olds-Pontiac-GMC, Williamstown, NJ; Larry Bossier, Bossier Chrysler-Dodge, Bryan, TX; Jeff Elhart, Elhart Dodge, Holland, MI; Steve McDaniels, Maplewood Toyota, Maplewood, MN; Tom Murphy, Northeast Lincoln Mercury, Philadelphia; Glenn Ritchey, Jon Hall Chevrolet, Daytona Beach, FL; Gordon Stewart, Gordon Chevrolet, Garden City, MI; and Jack TerHar, Jr., Sill-TerHar Motors, Broomfield, CO.

RouteOne plans to maintain operations on a 24-7 basis to accommodate Sunday and late-night dealer operations in a growing number of markets, including California and Florida.

RouteOne will showcase its system at the NADA Exposition Jan 31-Feb 3 in Las Vegas.