How It Works

 

In the highly competitive global automotive market, manufacturers need to optimise production efficiencies and speed of delivery of new vehicles to the consumer.

Optimisation of production is typically achieved by mass production techniques. However, much focus has been given in recent years to the idea of being able to build vehicles to customers’ specifications. Amongst other advantages in terms of creating in the client the feeling that ‘his’ car has been built on his own specification, such an approach reduces the number of cars that need to be discounted for sale because they have been built to a specification that the local market is not demanding.


Whether able to build to order or not, the next most important issue for the manufacturers is the speed of delivery to market. This is important, especially for mass-market vehicles, as delivery times can be the only differentiator between brands in highly competitive market environments.

 

Finished vehicle logistics is playing an important role in satisfying both needs. Post-production technical enhancement centres can adapt basic production models to suit individual customers and a sophisticated logistics network design can speed the flow of a vehicle from the factory and provide accurate delivery times for dealers and owners.


Distribution typically accounts for 30% of the sale price of the vehicle, although the physical process of that distribution accounts for a mere 4% of the total cost.
 
The remaining 26% of cost covers setting up and supporting a dealer network (10%), advertising and marketing (6%) and discounts and promotions (10%).