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Daily News Round UpBack

MG is calling on forward thinking dealers to join the brand

MG

MG Motor UK is calling for more dealers, specifically smaller groups, to join the brand and forge a strong relationship to drive results forward together.

The latest new car registration figures from the Society of Motor Manufacturers and Traders Limited (SMMT) showed that MG’s June 2015 performance was almost 20% higher than last year; whilst the year-to-date saw a rise of just fewer than 40%.

MG is looking for prospect dealers to join the franchise and be part of a company that cares more about building strong relationships than the colour of the tiles in the showroom.

Head of sales and marketing at MG, Matthew Cheyne, said: “We’re looking for the smaller groups, perhaps family owned, that have strong local relationships and are fed up of how they are treated by other manufacturers.

“We want to work with dealers who strive to deliver a great service and have a say in how they want their franchise to go in the future. We also want to reassure prospect dealers that we’re not going to come into your showroom and demand for the tiles to be changed, or to have different style coffee cups; we care more about listening to you, forging a strong relationship, and building a franchise for the future, together.

“MG understands that the best dealers are those who are well known in their area at the grass roots level and are not afraid to get out into their local community to put the product in front of customers. Hard working people build businesses so, if that’s you, help us build this business together.”

If you are interested in becoming part of MG’s dealer network, contact Sue Kent, network development manager, for more information on 0121 251 3500 or via email: sue.kent@mgmotor.co.uk

Source: am-online.com

TTIP has potential to boost transatlantic auto trade by 20% or more

The automotive trade could increase by 20%, following the 10th round of the Transatlantic Trade and Investment Partnership (TTIP) negotiations, according to ACEA.

The increase could represent transatlantic income gains of over $20 billion.

TTIP represents an opportunity to remove regulatory barriers, while maintaining high safety and environmental standards.

Following a recent study by the Peterson Institute for International Economics (PIIE), industry estimates that this rise would represent over 240,000 more vehicles traded annually, worth more than $9 billion, and supporting tens of thousands of jobs. Eliminating tariffs and achieving greater auto regulatory convergence would also provide greater consumer choice, lower costs and improve the international competitiveness of the American and European auto industries. The conclusions of the study are based on the experiences of the signatories of the UN 1958 Agreement

The American Automotive Policy Council (AAPC), the European Automobile Manufacturers’ Association (ACEA) and the Alliance of Automobile Manufacturers (Alliance) strongly support an ambitious outcome for the automotive sector, which maximises the consumer benefits and economic growth that could be achieved. The associations are supporting the TTIP automotive talks through coordinated engagement with the American and EU negotiators, as well as by supporting reports and studies that inform the talks, such as the PIIE study.

ACEA, AAPC and the Alliance are confident that transatlantic automotive regulatory convergence will result in large economic gains for both economies.

The conclusions of the study are based on the experiences of the signatories of the UN 1958 Agreement.

Source: am-online.com

HPI warns dealers of increased fraud risk with proposed mot extension

HPI is warning dealers that the proposed Government’s plans to consult on extending the MoT period from three years to four years could see the risk of fraud from clockers escalate.

Managing director for HPI Neil Hodson said: “There are clearly some safety concerns surrounding the idea of extending the MoT period by a further 12 months, but there is also an increased risk of fraud.

“Whilst it’s fair to assume that older cars are the most likely to have their mileage reading altered, the reality is that around a third of all cars checked by the trade with HPI are found to have a mileage discrepancy within the first three years of their life. Extending the period for a further fourth year, would see the number of pre-MoT cars with a suspect mileage, increasing putting dealers and used car buyers at significant risk.

“The danger for the dealer is that they unwittingly part exchange a clocked car, leaving them at risk of Trading Standards and legal repercussions, not to mention the damage to their reputation. Consumers may welcome the news of cost savings from a delayed MOT, but they could end up paying more than the car is worth, if they come a cropper of clocking. Turning back the miles allows fraudsters to push the price up on a vehicle. An unsuspecting buyer won’t realise they’ve just paid over the odds for a vehicle that’s done more miles than the odometer suggests, meaning more wear and tear and potentially, expensive repairs.”

The HPI National Mileage Register (NMR) collates and stores mileage data from a number of sources, including the DVLA, warranty and service records. A mileage check against the NMR includes an NMR Investigation, if the mileage is found to be discrepant. This will exhaust all avenues to ensure the mileage is legitimate or not – enabling the dealer to make an informed purchase decision.

Neil Hodson added: “A mileage check is a vital tool for dealers looking to operate best practice. Not only will it give dealers the reassurance that they have met their duty of care under the Consumer Protection from Unfair Trading Regulations, it will protect their business and their customers, as well as raising standards within the motor industry, as a whole. The proposed extension on the MoT offers motorists savings on one hand, but it could cost them and the industry a lot more if it gives clockers a free ride.”

Source: am-online.com

FCA asks dealers to reveal claim ratios on all general insurance products

The Financial Conduct Authority (FCA) is proposing that automotive retailers must show a claims ratio on all general insurance add-on sales as part of new measures it is looking to introduce.

The FCA recently released a discussion document around the value provided by general insurance products and has suggested three potential solutions for dealers to adopt:

– a claims ratio as a stand-alone value measure.

– a package of claims frequencies, claims acceptance rates and average claims pay-outs.

– claims ratios and claims acceptance rates.

The “value measures” will affect all general insurance add-on sales across all market sectors, not just automotive, but the discussion paper follows on from the FCA’s crackdown on GAP insurance sales.

New value measurement rules will likely impact on the way products like MoT insurance, tyre and alloy insurance and paint protection insurance are sold in the future.

Tim Heavisides, Car Care Plan chief executive, told AM: “These proposals are totally separate to the new GAP insurance rules.

“We expect the process to go to the consultation period after September and we could see new regulations implemented by the middle of next year.”

Christopher Woolard, director of strategy and competition at the FCA, said: “We are committed to introducing a measure of value for general insurance products.

“We believe consumers in this market need to have greater transparency about what they are paying for.”

Woolard believes the FCA’s suggestions set out in the paper will boost competition between finance and insurance companies to offer better deals.

The FCA is now inviting the automotive industry to put forward its own ideas that will give consumers an indication of the value of general insurance products.

The deadline for responses to the FCA’s discussion document is September 23 and dealers can download the full paper here.

Click here to view the most recent policy statement from the FCA.

Source: am-online.com

Auto Trader reveals fastest selling cars in June

Auto Trader has revealed that the 2014 Citroen Grand C4 Picasso MPV diesel automatic was its fastest selling car in June.

Overall, cars in the national top ten sold more quickly than their equivalents in May, taking an average of 20.7 days to turn compared with 22 days. That compares with an average of 55 days for all cars on forecourts.

The average price of the nation’s quickest sellers also fell significantly month-on-month, from £14,953 to £9,450.

Vauxhall’s Insignia was the only car to take its place in both May and June’s top ten. The 2010 petrol hatchback took fifth spot in May and fourth place in June. The 2011 Insignia took ninth spot in June too.

London, the North West and Scotland proved to be regional hot spots for speedy sales last month. On average cars in the top ten sold in just 16 days in London with the 2011 BMW 3 Series diesel manual taking just nine days to turn. In the North East, cars in the top ten sold in just 15 days with the 2014 Ford Galaxy MPV diesel taking just 6 days to turn. In Scotland top ten cars turned, on average, in 18 days.

Auto Trader director, retailer and consumer products Karolina Edwards-Smajda said: “Stalwarts like the Nissan Qashqai continue to demonstrate their value as a forecourt acquisition, but this month we’ve also seen less obvious cars like the Chrysler Ypsilon make it into the national top ten. What’s really interesting however is the variation in speed-of-sale by different regions.

“In London, the North West and Scotland, cars in the top ten took an average of less than 20 days to sell. However, when looking at the East of England, Wales and the South West, we found that they took more than twice as long to leave forecourts: the average top ten model taking more than 40 days to turn.”

Source: am-online.com

FTA is against banning lorries in cities

The FTA has said it is against banning HGVs during peak hours in cities, in response to David Cameron examining the case for such bans.

According to reports, the prime minister told the all party parliamentary group on cycling yesterday that he would ask transport secretary, Patrick McLoughlin to investigate the possibilities of several measures to improve cyclist safety, including possible HGV bans.

Christopher Snelling, head of urban logistics at the FTA, said: “Even a medium-sized lorry would have to be replaced with 10 vans – which means overall safety would not be improved, let alone the emissions and congestion consequences.

“It has to be remembered that we don’t choose to deliver at peak times on a whim – our customers need goods at the start of the working day.”

The FTA has written to the prime minister on the issue of cycle safety and is having ongoing discussions with the transport secretary and department for transport officials over the best ways to improve safety for all road users while preserving efficiency.

Snelling said: “What we are looking at is the safety of everyone. For example while early morning is rush hour for cyclists, the pedestrian peak is later. Forcing deliveries outside morning peak would interact with another group of vulnerable road users.”

He said there were better approaches to making busy city roads safer. They included: increased targeted enforcement against HGVs and drivers that do not comply with safety regulations in key areas such as London, improved road infrastructure, such as road surfaces and junctions, tipper vehicle operators to commit and work to the Construction Logistics and Cyclist Safety (CLOCS) standard incentives from Government to make lorries with better visibility more available and commercially viable, allowing deliveries operators to work outside the peak, such as easing night-time restrictions like the London Lorry Control Scheme (that ends at 7am each morning) and progressive improvement of safety standards for vehicle equipment from DfT, in line with what is possible for industry.

Snelling added: “All road users have a role to play in improving road safety. Better awareness, training and behaviour is needed on all sides to make our roads as safe as they can be. Things can improve. The number of HGVs involved in fatalities in the UK has halved in the last 12 years, which shows the success of the progressive approach to improving safety.”

Source: fleetnews.co.uk

Westminster Energy, Environment and Transport Forum to discuss developing low emission transport

The Westminster Energy, Environment and Transport Forum will discuss the development of low emission transport in the UK at a seminar in London, on December 8.

The meeting is timed to follow the announcement of the winners of the Go Ultra Low City Scheme in autumn 2015, part of a £65 million fund for cities to become international leaders in low emission vehicles (LEVs).

Keynote speaker will be Richard Bruce, head of the Office for Low Emission Vehicles (OLEV).

Delegates will assess technological design and innovation in the electric vehicle market, and look at the next generation of hybrid vehicles, as well as the role of alternative fuels in the low emission arena and progress towards educating drivers on fuel-efficient driving habits.

They will also examine the ability of electricity networks, the strategic road network, and the automotive manufacturing sectors to adapt to an uptake of LEVs, as well as skills issues.

Further planned sessions focus on investment; consumer and business engagement in take-up of LEVs; and what other transport sectors, including aviation and shipping, are doing to reduce emissions.

Source: fleetnews.co.uk

Used cars in June take 55 days to shift off forecourts

The average used car on forecourts took 55 days to sell in June, according to Auto Trader figures.

The online classified group also published data for the top 10 fastest selling cars in June which took on average 20.7 days to sell.

This was better than the performance in May when cars in the top 10 were on forecourts for 22 days.

The national Top 10 included a Citroen C4 Picasso and Mercedes CLS which sold in 19 days in June while a Hyundai ix35 Estate, Vauxhall Insignia and Chevrolet took 20 days. (See table)

Auto Trader also published data for regional performances. The regional fastest seller leagues revealed the popularity of the Nissan Qashqai.

As well as taking top spots in the South West and Wales, the Sunderland-built model also made third position in London and fifth in its home territory, the North East.

On average cars in the top ten sold in just 16 days in London with the 2011 BMW 3 Series diesel manual taking just nine days to turn.

In the North East, cars in the top ten sold in just 15 days with the 2014 Ford Galaxy MPV diesel taking just 6 days to turn. In Scotland top ten cars turned, on average, in 18 days.

“Stalwarts like the Nissan Qashqai continue to demonstrate their value as a forecourt acquisition, but this month we’ve also seen less obvious cars like the Chrysler Ypsilon make it into the national top ten,” said Karolina Edwards-Smajda Auto Trader director, retailer & consumer products. “What’s really interesting however is the variation in speed-of-sale by different regions.

“In London, the North West and Scotland, cars in the top ten took an average of less than 20 days to sell. However, when looking at the East of England, Wales and the South West, we found that they took more than twice as long to leave forecourts: the average top ten model taking more than 40 days to turn.”

Source: motortrader.com

Pendragon switches Honda from Stratstone to Evans Halshaw

Pendragon is now selling Honda cars through its volume Evans Halshaw arm instead of its Stratstone prestige division.

The UK’s largest dealer group said the move was operational rather than brand related and its last remaining Honda business would benefit from being sold through Evans Halshaw with its new Move Me Closer service, which launched in February.

Move Me Closer means customers interested in buying a Honda anywhere in the country can have the vehicle moved from Bedford to a more convenient location with no additional cost or obligation to purchase.

Pendragon sold a Honda dealership in Bradford to Vantage in February leaving it with the Bedford Honda business.

“The way sites are spread it made more sense to join Evans Halshaw with it being a single site franchise,” said Natalie fox, group PR and event lead for Pendragon.

“It was an operational move in terms of national footprint and where our businesses are spread.

“It means Honda can benefit from some of the other initiatives within Evans Halshaw such as Move me Closer.

“We are looking at all the other options and how it can benefit from being part of Evans Halshaw.

“There are a lot of exciting launches coming up with the Civic R and others and we are looking at dealership events and what we can do to support the dealership,” said Fox.

Stuart Foulds, franchise director for Evans Halshaw, said: “We are really excited to welcome the Honda brand to the Evans Halshaw Group and with an array of new model launches including the new Civic Type R, Honda Jazz, and HR-V later in the summer, we’re expecting big things for the site.

Source: motortrader.com

Oxford could introduce WPL by 2019, council says

Businesses in Oxford could be charged for the parking spaces they own by 2019 to help ease congestion in the city.

The proposal is part of Oxfordshire County Council’s Local Transport Plan for up to 2030.

As part of the white paper, the council has outlined £1.2 billion worth of transport improvements. The ideas will be used to lobby the Government to pay for the upgrades.

The plan is set to be approved tomorrow (Tuesday 21 July).

The levy would charge firms for the number of parking spaces they own above a threshold, similar to a scheme that is in place in Nottingham where businesses with 11 or more parking spaces are charged £375 per space each year.

Oxford is yet to pinpoint the charge or number of spaces that would be charged.

Other transport improvements outlined in the plan includes a new network of park and ride services, rapid transit bus services servicing the busiest parts of the city and a scheme to build bus tunnels underneath the city.

“The plan outlines the council’s ambitions, but it does not mean every single thing be implemented, as everything needs to be consulted on and approved by the cabinet,” an Oxfordshire County Council spokesman told BusinessCar. “The plan is reviewed every year, and 2019 is the earliest the workplace parking levy could be considered and rolled out.”

Source: businesscar.co.uk

Government confirms £20m driverless car research fund and launches code of practice

The Government has confirmed a £20 million fund for research and development into driverless vehicles, and has launched a code of practice for testing autonomous vehicles.

The Government said the investment would put Britain at the forefront of the intelligent mobility market, which it expects to be worth £900 billion by 2025.

The Government wants bidders to put forward proposals in areas including safety, reliability, how vehicles communicate with each other and how driverless vehicles can give an ageing population greater independence.

Successful bidders will match the funding with their own money.

The code of practice provides the industry with framework in order to safety trial cars and create more sophisticated versions of models that already exist.

Automated vehicles will have to carry data recording devices which is capable of recording the following information as a minimum:

  • Whether the vehicle is operating in manual or automated mode
  • Vehicle speed
  • Steering command and activation
  • Braking command and activation
  • Operation of the vehicle’s lights and indicators
  • Use of the vehicle’s horn
  • Sensor data concerning the presence of other road users or objects in the vehicle’s vicinity
  • Remote commands, which may influence the vehicle’s movements

All testers of autonomous vehicles must carry a valid driving licence, while the Government recommends only those with “considerable experience” should test the driverless vehicles. Insurance will still be required at all times, and all traffic laws will remain in place during testing.

“Our vision is that through careful testing, well designed automated vehicles will be developed which, when operating in an automated mode, will display exemplary driving characteristics, improving the safety of all road users,” the Department for Transport said in the code of practice.

“Driverless cars will bring great benefits to our society and economy and I want the UK to lead the way in developing this exciting technology,” said Transport minister Andrew Jones. “Our code of practice clearly shows that the UK is in the best position when it comes to testing driverless cars and embracing the motoring of the future. We now look forward to working with industry to make this a reality.”

“Much research and development is required before driverless cars become commonplace on our streets, but the launch of the code of practice brings this vision a step closer,” said Professor Nick Reed, technical lead of the Gateway driverless car project. “It sets the scene for the safe evaluation and development of highly and fully automated vehicles for years to come and is another example of how the UK is leading the charge in this area. Combined with the £20m funding, the UK is now firmly positioned at the centre of future mobility.”

The £20 million fund is part of a £100m budget for driverless cars that was announced by George Osborne in the Spring 2015 Budget.

Source: businesscar.co.uk

Bosch aims to inspire female engineers with motorsport and mentoring

More than 3,000 of the world’s most promising future engineers took to Silverstone on July 9 for the annual Formula Student competition, an event which Bosch sponsored for the eighth year running. Around 10% of Formula Student competitors were female, reflecting industry’s continuing efforts to increase the number of women in engineering.

By 2020, Bosch wants 20% of its worldwide leadership roles to be occupied by women, up from its current level of 12%. To provide women with assistance and support on their career paths, Bosch Group offers special mentoring programs, networks, seminars, and training courses. In total, Bosch invests £135 million each year in further training and development.

To support female students looking to break into the industry, the Bosch IngA3 mentoring programme supports women currently studying for technical degrees. The initiative gives female undergraduates academic and practical advice, including which courses to undertake and how to gain work experience.

It is no secret that women are still underrepresented in engineering and it is important that technology companies such as Bosch play their part in nurturing the new talent needed in order to secure the future of our business. Bosch is actively working to redress this balance within the company and believes supporting activities like Formula Student and the IngA3 mentoring scheme will play an important role in developing the talented engineers, both male and female, of the future.

Source: pmmonline.co.uk

Sainsbury’s follows Morrisons as diesel prices drop below unleaded for the first time since 2001

Average diesel prices are likely to fall below unleaded for the first time in 14 years following the latest announcement by Morrisons of a 2ppl cut on diesel prices across its 336 petrol stations from today. Sainsbury’s has now followed with the same price cut on diesel from tomorrow.

The supermarket announcement follows the RAC’s recent Fuel Watch report in which it described the price of diesel as the ‘elephant in the room’, with wholesale prices 1ppl to 3ppl lower than petrol, yet the average price of a litre of diesel at 120ppl, compared to 117ppl for petrol.

Mark Todd, petrol director for Morrisons, said: “Because of the recent price drops in the wholesale diesel price, we are able to pass on these savings to our customers. This is a milestone in motoring and many younger drivers won’t remember the last time that diesel prices were lower than unleaded.

“While we are cutting diesel prices today, we will continue to look for opportunities to pass on savings on unleaded as soon as we can.”

He said the reduction in the diesel price is partly being caused by global economic factors such as weakness of demand in Europe and an increase in diesel refining capacity. “There will be a handful of Morrisons stations where diesel prices will remain higher than unleaded and this is because of local competitive factors.”

Avishai Moor, Sainsbury’s head of fuel, said: “With the summer holidays fast approaching we’re helping our customers get away for less by cutting up to 2ppl off the price of diesel from tomorrow. For the second time in less than two weeks, we’re proud to be offering our customers great savings when they fill up with us.”

Source: forecourttrader.co.uk

FORD DEVELOPING ADVANCED HEADLIGHTS

Driving at night, particularly on unlit roads, can be a nerve-wracking experience. Ford is developing new lighting technologies that will enable drivers to more easily identify potential hazards, including pedestrians, cyclists and animals.

Ford’s Camera-Based Advanced Front Lighting System can widen the beam at junctions and roundabouts to better illuminate hazards that are not in the direction of travel. New Spot Lighting technology helps draw the driver’s attention to pedestrians, cyclists and even large animals in the vehicle’s path or even just off the road.

‘Many people who drive at night have had to quickly react to someone or something suddenly appearing in the road – as if from nowhere. Ford’s Camera-Based Advanced Front Lighting System and Spot Lighting help ensure the driver is quickly alerted to people or animals that could present a danger,’ said Ken Washington, vice president, Ford Research and Advanced Engineering.

Camera-Based Advanced Front Lighting System builds upon Ford’s Adaptive Front Lighting System and Traffic Sign Recognition, which are already available in Ford vehicles, to provide drivers with improved visibility at roundabouts, stop, and give way or yield signs.

The system also uses GPS information to better illuminate bends and dips on a chosen route. Where GPS information is not available the technology uses a forward-facing video camera mounted in the rear-view mirror base to detect lane markings and predict the road’s curvature, using the information to illuminate the area more effectively.

In a further evolutionary step, in those instances, the camera stores the information in the navigation system. When next the driver uses the same road again, the headlights adapt to the course of the road automatically to better light the way.

Camera-Based Advanced Front Lighting System was developed at Ford’s European Research and Innovation Centre in Aachen, Germany, and Ford expects the technology to be available for customers in the near term.

Spot Lighting – currently in the pre-development phase with Ford engineers in Aachen – uses an infra-red camera in the front grille to simultaneously locate and track up to eight people and bigger animals, including larger dogs, at a range of up to 120 metres.

The system can spotlight two hazards for the driver with a spot and a stripe on the road surface, illuminated by two special LED lamps next to the fog lights. The highlighted objects are displayed on the screen inside the car, marked in a red or yellow frame, according to the proximity of the object and the level of danger presented.

‘Camera-Based Advanced Front Lighting can help make it easier for the driver to travel at night in unfamiliar surroundings, and to more easily see unexpected hazards. At roundabouts, for example, our system helps the driver to clearly see the exits – and check if cyclists and pedestrians are crossing the road,’ said Michael Koherr, research engineer, Lighting Systems, Ford of Europe. ‘Spot Lighting makes potential hazards in the road ahead more easily visible to the driver – whether that is a pedestrian, a cyclist, or even a large animal.’

Road safety reports show that on unlit roads there is a significantly increased likelihood of accidents, and that such accidents could involve personal injuries, or fatalities.

Source: bodyshopmag.com

EUROTAXGLASS’S LAUNCHES NEW AUTOMOTIVE INTELLIGENCE BUSINESS

A new business unit designed to provide automotive data and insight to manufacturers, importers, fleet and finance companies on a European basis has been created by EurotaxGlass’s (ETG), the parent company of Glass’s.

Called Automotive Intelligence and Consulting (AIC), its objectives include expanding ETG’s range of consulting and intelligence services as well as providing easier access to ETG data and insights. It will also manage total cost of ownership and car to market solutions as well as live retail pricing.

Doctor Christof Engelskirchen has been appointed as managing director of AIC while Steffen Schick, former head of ETG Global Services, has been named as chief strategy officer.

Dr Engelskirchen said, ‘Providing essential data to international companies is a key activity for ETG and the creation of the new business unit will help us to gain additional focus as well as expand our range of services into new areas.’

‘This is a very exciting development and one that we are sure will soon have an impact on the market for European automotive data.’

Dr Engelskirchen explained that AIC’s combined experience from a team of automotive industry experts, statisticians and management consultants to deliver outstanding results.

‘We regularly provide services to all automotive manufacturers, their European headquarters, national sales companies and importers.’

‘With our unique combination of skills, we are capable of addressing the most complex challenges that these companies face, such as the ideal specification of extended warranties, dealer network optimisation, and the best commercialisation strategies for new vehicle concepts and powertrain technologies.’

Dr Engelskirchen added that AIC would aim to address client needs by going beyond pure data delivery, helping clients interpret data and draw conclusions.

He said, ‘Together with our clients we optimise residual value and total cost of ownership performance up to five years before the launch of a car by establishing challenging targets and by providing objective assessments and recommendations for pricing, specification, vehicle concept and volume planning.’

AIC has been created as part of a strategy to deliver market leading insight to ETG’s pan European customer base.

Source: bodyshopmag.com

CAR SALES CONTINUE TO RISE

European new-car sales grew by 8.4% in the first half (H1) of 2015, with 25 of 29 countries recording increased sales according to JATO Dynamics.

JATO Dynamics reports that total car sales in H1 2015 were 7,410,510 units, the highest H1 sales since 2010. All of the top ten models and top ten brands recorded higher H1 2015 sales. The Volkswagen Golf, Ford Fiesta and Renault Clio were the best-selling cars for the first six months of the year.

Sales in June rose to 14.6% compared to a year earlier, following a slowdown in sales during May.

Brian Walters, vice president of Data at JATO Dynamics, commented, ‘Confidence in the European market last month was clearly well placed, as the car industry reported strong sales growth for the first half of the year in most markets.’

Source: bodyshopmag.com

Mercedes revamps its supply chain to trim costs

Mercedes-Benz aims to reduce its logistics costs by about 20 percent per vehicle as the company invests hundreds of millions of euros in a global reorganization of its supply chain network.

The automaker has increased production outside of its German home over the past decade but many of the components used in its cars are still sourced from Europe. This increasingly stretches its supply chain because of the distances the parts have to travel, placing a bigger strain on a system that is already trying to cope with record demand.

Logistics is a “very significant” cost position, according to Mercedes production and supply chain boss Markus Schaefer, who said supply chain costs can exceed manufacturing costs in some of the division’s lower-wage plants.

“With more than 30 vehicle derivatives each built from several thousand parts, the complexity is immense,” Schaefer told reporters in Speyer, Germany, where the carmaker last week opened a 90 million-euro consolidation center. Here components from European suppliers will be consolidated and repacked more efficiently for shipping abroad to Mercedes plants in China, the U.S., and South Africa.

Mercedes may establish similar centers in growth regions like China and North America, the company said in a statement.

Mercedes vehicles and cars for its Smart small-car brand, along with engines and components, are built in 26 different factories worldwide including production at partners such as Renault, Magna Steyr and Valmet. The automaker employs 7,500 people in its supply chain operations.

Delivering the right part to the right factory at the right time and in the right place on the assembly line is an increasing challenge, especially when the company must ensure that inventories are lean to control costs but not too lean that the supply chain risks tearing.

Source: europe.autonews.com

Posted by Lois Hardy on 20/07/2015