Business that pioneered online checks on motor vehicles is now vying for exclusive Australian deal.
Auckland company MotorWeb is about to do for Australia what it has already done for New Zealand: take government motor vehicle registration data and package it into a commercial product.
In November it will begin a three-month pilot project to demonstrate that a service it pioneered in New
Zealand a decade ago can be replicated across the Tasman.
The prize, if the trial is a success, is a three-year exclusive supply deal with the Australian insurance industry. After that, with the advantage of being first to market, it will have the whole of the country's motor trade to compete for.
For MotorWeb founder Pat Costigan it's a case of history repeating itself. From an idea he had in 1992, he has built a New Zealand business founded on gaining access to the motor vehicle registry.
With information from the register, combined with data from several other sources, MotorWeb has created a service that simplifies legal compliance and improves consumer protection in the motor industry.
Car dealers can use the online service to transfer ownership of a vehicle and prospective buyers can run an instant check of a vehicle's ownership history.
"We were basically pioneers in New Zealand, we believe, in e-government," says Costigan.
The breakthrough first time around was to persuade government land transport and commercial affairs officials to give MotorWeb access to the vehicle registry. Costigan says only his wide-eyed lack of experience gave him the persistence needed to prise open the government data store.
"I went to them and said, 'all I need to make this wonderful thing happen is to have an interface to plug into and I'll take data out and combine it with other data and then I'll modify it and write it back to you'.
"But nobody had ever asked for that before and it was highly scary. I was innocent and naive enough to think it was doable," Costigan says."
After numerous presentations covering his business plan, and data security and privacy issues, he eventually got the support of a couple of officials and was given the go-ahead.
While access to the raw data was critical, the business could easily have failed in the 15 years since it started. It has had to ride out the ups and downs of the early dot-com era, which not only stopped countless online ventures in their tracks but also made investment money hard to find for years after.
"As a small company trying to make sure you survive the dot-com crash and everything else around you, we ran the business extremely lean," says chief executive Chris Knight, who occupies premises in Takapuna with the company's seven other staff.
By 2008 MotorWeb dominated the trade end of the vehicle market, which accounts for about 30 per cent to 40 per cent of car sales. The trade, and a limited number of finance industry customers, were providing about 90 per cent of MotorWeb's revenue.
With up to 70 per cent of cars being bought and sold privately, growth potential in the domestic market lies with the public. For $30 MotorWeb sells a vehicle report, giving a car's ownership history, whether money is owed on it, its specifications, safety and fuel-economy ratings and market value.
But only about 20 per cent of private car buyers bother with a vehicle check. And when most people buy a car only every three years, making them aware of MotorWeb at the moment they might use the service is tricky.
Close relationships with Trade Me, the Motor Trade Association and Vehicle Testing New Zealand help, Knight says, and the company has begun a concerted marketing effort.
Australia, however, with a population five times New Zealand's, has greater potential still. In 2007 MotorWeb persuaded Australian authorities it could commercialise their vehicle data.
Knight says MotorWeb found itself up against global IT providers when Austroads, representing eight state and territorial road transport authorities - including the New Zealand Transport Agency, oddly enough - went to market for a solution.
"We turned up in Australia, logged into our system live on a laptop and showed them a vehicle report. They were astounded by the amount of information that was available in New Zealand.
"We then showed them how we could do a change of ownership, so we were in Australia updating records in the New Zealand motor vehicle registry over the internet."
It was a more compelling pitch than MotorWeb's multinational rivals', none of which could offer more than promises, and it was enough to convince Austroads to set up November's trial.
"Our advantage was we had done this already for 10 years and were experts in the field," Knight said.
The pilot project must prove the service's viability and that data can be kept secure. If all goes well MotorWeb will begin to get a payback, first by being an exclusive supplier for three years to the insurance industry, then by being able to compete with others for the rest of the market.
But there's a catch. The trial is at MotorWeb's expense and there's always the risk that it might a flop. Not that Knight is worried.
"It's an enormous punt but we believe from our experience in New Zealand that we can do it. It's an awful lot harder in Australia, with seven different jurisdictions and seven different bits of data.
"But once it gets up and going we believe we'll turn it into a very successful business. The end game for us is to replicate what we've done in New Zealand in Australia."
It's a deal
Car sales, 2008
* Sold by dealers to public 187,000
* Sold by public to dealers 125,000
* Private sales 462,000
Source: NZTA
