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MCL Selects Arkona to Enter DMS Market in U.K.

April 2, 2007

Tunbridge Wells, England — MCL Group Ltd. and Arkona Inc. announced a business agreement to introduce Arkona’s automotive DMS into the U.K. market. This announcement is the culmination of more than two years of joint business and product development efforts to provide U.K. automobile dealers with a more robust, fully VAT compliant, and cost-effective solution for managing their operations.

Headquartered in Kent near London, MCL is a wholly owned subsidiary of Itochu Corporation of Japan. MCL has more than 30 years of experience in providing IT, distribution, and financial services to the automotive industry. MCL was for many years the importer of Mazda and Kia into the U.K. Since then, MCL has expanded into retail outlets for new and used car franchises.

Today, MCL has 20 locations and nearly 800 employees throughout the U.K. on turnover of 150 million BP ($US300 million).

“We are all very excited about our partnership with Arkona and the opportunity to offer dealers the choice of a new product for the U.K. market with Arkona’s Dealer Management Solution,” said Steve Peet, business development manager of MCL Group Ltd. “MCL spent three years reviewing various alternatives to determine how to best enter the DMS space in the U.K., and to capitalize on the lack of technological advancement and considerable dissatisfaction within the retail dealer industry. When we discovered Arkona and how they had addressed the same problems in the U.S., we had found our answer and our partner. The ASP model employed by Arkona is ideally scalable to address the needs of any size dealer and is the advantage we have been looking for in the U.K. Dealers here in the U.K. face the same challenges as their U.S. counterparts,” concluded Peet.

Under the agreement between MCL and Arkona, the sales, marketing, training and support for the U.K. version will be the primary responsibility of MCL, with Arkona providing level two product support. Both companies will work closely together to make enhancements, which will benefit dealers on both sides of the Atlantic.

“Our business plan did not include a move into the U.K. market at this time, but when a partner like MCL approached us with the opportunity, the timing became right,” said Alan Rudd, CEO and chairman of Arkona Inc. “Both MCL and Arkona are committed to reducing dealers’ costs of managing their businesses, while increasing their profitability. With the advent of new technologies, a dealership should realize a decrease in IT costs and increase in productivity. However, that has not been the case in either the U.K. or U.S. retail dealership market —something we clearly intend to change.”

The product has been in beta testing at U.K. dealerships, where it has been vigorously tested to ensure it meets the needs of U.K. dealers. MCL and Arkona will be holding a joint event to launch the general availability of the product with demonstrations to interested dealers, analysts, and the press during April.

“We haven’t created a new DMS product. We’ve just enabled a different interface to support the unique business practices that face the U.K. dealer,” said Richard Holland, president of Arkona. “The user merely selects the U.K. interface, and the software does the rest. In this way, we avoid the problems that surface, such as having to support multiple versions of the same product. There is no degradation in the performance of the product, regardless of which interface the user selects.”

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