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Microsoft, Softbank To Launch CarPoint Japan

Softbank Corp. has announced the formation of a joint venture with Microsoft Corp. and Yahoo! Japan Corp. to create a Japanese version of MSN CarPoint, Microsoft's popular US-based online automobile purchasing service.

The joint venture company, CarPoint Japan KK will be capitalized in April at about 840 billion yen (US$7 million). It will be owned 50 percent by Softbank, Japan's largest distributor of software and computer technology publications; 40 percent by Microsoft; and 10 percent by Softbank-affiliate Yahoo! Japan.

The MSN CarPoint Web site, opened in October 1995, is the most-visited online car-buying service in the United States. It currently reaches more than 3 million users each month, generating over $450 million in monthly automobile sales for its 2,500 auto dealers.

"The Internet is the ultimate marketplace that brings buyers and sellers together in a more efficient and convenient transaction," said Microsoft CEO Bill Gates. "The Japanese version of CarPoint will give auto manufacturers and dealers the opportunity to showcase their products and services to over 80 percent of the Internet audience in Japan."

CarPoint Japan will offer localized content and services. Like the US Web site, it will provide prospective buyers with comprehensive car-purchase and car-care information, including model reviews, detailed specifications, pricing and financing data, a buying service, and maintenance recommendations.

Users will be able to contact dealers, get purchase price estimates, and even make an appointment to test drive a vehicle.

Plans call for CarPoint Japan to open in November 1999 for new-car sales, with used-car brokerage operations expected to get under way in February 2000.

"There have been individual efforts by car manufacturers to sell their products over the Internet, but there is no independent source of information in Japan yet," said Softbank CEO and president Masayoshi Son, who will serve as president of CarPoint Japan KK. "We think we can integrate all of the information needed by customers to purchase a car online."

By leveraging the Internet traffic flowing through search engine/portal site Yahoo! Japan and MSN Japan's existing subscriber base, CarPoint Japan will have access to 80 percent of Japan's Internet users.

Japan's automobile market has been sluggish in recent years. Sales dropped 9 percent in 1998, with sales of imports falling by 22 percent.

Increasingly, as part of their effort to stimulate demand, Japanese automotive dealers and makers are incorporating the Internet into their sales and information dissemination strategies.

All of the major manufacturers, such as Toyota and Mazda, have Web sites featuring online showrooms and dealer information.

Many dealers, meanwhile, have installed Internet-based information kiosks in their showrooms that allow prospective buyers to view visual simulations of different car models and accessories and take simulated test drives.

In a recent poll of major car dealers in Kobe and Hyogo prefecture, 13 percent said they believe consumers are using the Internet to buy cars today while another 75 percent said Internet sales will eventually catch on.

The dealers also expressed concern that the Internet could revolutionize new car sales and possibly destroy the current system of dealer franchises and territories.

Both Son and Lindsay Sparks, general manager for MSN CarPoint, expressed confidence that the CarPoint Japan will gain industry support.

"We are very, very conscious that dealers and manufacturers need to be brought together" into the venture, Sparks said. "I thinkthat dealers' business models will shift, but in a profitable way."

CarPoint Japan will include the Japanese version of DealerPoint, a service designed to help automotive dealers track and manage their Internet customers. Dealers pay a "lead" fee based on how many customers inquire directly with them about a specific car through the Web site.