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Major Software Vendors Battle for Big Dealerships

June 6, 2005

ADP and Reynolds are battling to claim the stakes of the nation’s largest dealership groups who plan to consolidate their stores’ management software, according to Automotive News.

ADP has helped convert systems for five of the 10 largest dealership groups in the country, including AutoNation, Inc. and Sonic Automotive, Inc. Reynolds, capturing the attention of only one large dealership group, UnitedAuto Group, Inc., hasn’t been as successful as ADP.

The trend to use one management system has grown in recent years as many dealership groups have realized their success will be rooted in organizational efficiency and reduced costs rather than rapid expansion. With a single system in place, dealership groups can get a more accurate picture of their stores' activities, costs and inventories. Converting to one type of software also saves money by eliminating the need to maintain more than one system.

ADP won Sonic’s business a month ago, when president and CFO Lee Wyatt decided to convert all Sonic’s 159 stores to ADP software. Wyatt told Automotive News that it took the company more than a year to decide to consolidate. “We were never going to drive operations, performance and improvement the way we need to unless we have one system,” he said.

Converting all stores to one system can be traumatizing to employees who have worked with different software for an extended period of time – many are reluctant to make the switch. Sonic went to ADP for help with this sensitive change because it felt the company had more training resources to commit to the consolidation than Reynolds. Sonic was also concerned about the change in management at Reynolds; specifically, the abrupt resignation of former CEO Buzz Waterhouse.

Reynolds CEO Finbarr O’Neill says the company is aggressively marketing software that helps dealerships manage customer relationships and Websites. He adds that Reynolds has been acquiring a larger share of stores in the Hendrick Automotive Group, and has also been doing well with distributors such as Southeast Toyota Distributors, servicing 166 of its dealerships.

ADP and Reynolds are the two most prominent vendors of software management systems for the automotive industry, with ADP saying it holds 41 % of the market, and Reynolds saying its market share is 40%.

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