Joint venture by Ford, Trilogy to enhance consumer Web sites

The venture, expected to be operating in 30 days, will employ at least several hundred people, many of them newly hired workers. Other offices will be in Dearborn, Mich.; Irvine, Calif.; and Europe.

Financial terms were not disclosed, though Ford will be the majority owner of the venture. Officials for both companies said they chose to create a business and to place it in Texas as part of a strategy to give the operation the culture of an Internet start-up.

The venture, which has not yet been named, is aimed primarily at enhancing the manufacturer's own Web sites for brands including Ford, Lincoln, Mercury, Volvo, Jaguar and Mazda.

The sites will offer content for existing car owners, as well as information for those shopping for cars, said Chris Porch, a co-founder and vice president at Trilogy, who will serve as chief executive of the venture. Ford is a longtime customer of Austin-based Trilogy, a leading developer of electronic-commerce software. Trilogy is also the parent of an auto-purchasing Web site, carOrder.com.

"You could customize your automotive home page for the vehicles you own, and get information on traffic, gasoline prices, things you want to know on a weekly or daily basis about oil changes, body shop work or warranty service," Mr. Porch said. "Nothing around today is coming close to delivering on that vision."

The deal comes as Ford, General Motors Corp. and other vehicle manufacturers are all grappling with how to use the Internet to operate more efficiently.

Also Wednesday, Toyota Motor Sales USA Inc. said it would form a partnership with i2 Technologies Inc. of Farmers Branch to operate an electronic marketplace for the automotive replacement parts business. The iStarXchange partnership, jointly owned by i2 and Toyota, will serve the vehicle repair and maintenance industry. The companies said they would encourage all manufacturers to participate in the marketplace.

Ford has been driving particularly hard at Internet initiatives. Earlier this month, Ford announced a plan to provide all of its 350,000 employees with home computers. The company has alliances with Yahoo Inc. and Microsoft Corp.'s CarPoint site for selling new vehicles. Ford's chief executive, Jacques Nasser, regularly seeks counsel from Austin computer magnate Michael Dell on e-commerce strategies.

"This is one of many deals that Ford will be doing, and it's another step in the right direction," said Jack Staff, chief Internet economist for Zona Research Inc. of Redwood City, Calif.

Using the Internet, manufacturers are seeking the kinds of efficiencies that Mr. Dell pioneered at Dell Computer Corp., better matching the desires of customers with parts procurement and factory production. Market research shows that between 20 percent and 30 percent of the cost of a new vehicle is the result of inefficiencies in the supply channel, Mr. Porch said.

"The hope is the Internet can offer us more accurate forecasting," said Brian Kelley, a Ford vice president. Reducing inventory of parts and finished vehicles, he said, will lead "to better profitability for dealers and better value for customers."

Ford believes customers want Web sites devoted to individual manufacturers, as well as third-party Web sites where customers can compare models from different manufacturers, Mr. Kelley said.

When many customers decide it's time to buy a new car, they simply type the name of the brand they currently own into their Internet browser.

"Some consumers are brand-loyal, and they know what they want," he said. "Our priority is to make sure our branded sites are world-class."

Jerry Reynolds, national chairman of the Ford Dealer Council, said dealers support Ford's latest Internet initiative. "Clearly, we are for anything that will get us more leads," said Mr. Reynolds, who also is managing partner of Prestige Ford in Garland. "If they're going to make Ford.com state-of-the-art, it's going to equate to business for us."

Staff writer Terry Box contributed to this report.