Fleet News

End to stockpiling of cars could save £500 million

THE spectre of fields full of unsold cars will haunt vehicle manufacturers in more ways than one, according to KPMG's report 'Europe on the Move'. It cites research by the International Car Distribution Programme which suggests that savings of £500 million are achievable if car makers across Europe adopted lean distribution and put an end to stockpiling cars.

This would also save £1 billion in reduced dealer discounts, and free up storage space equivalent to 250 Millennium Domes. The report believes customers are unwilling to pay for the distribution inefficiencies of stockpiled cars, and calculates that the difference in distribution costs for a £10,000 car could vary from £250 under a lean system to £431 under a more traditional distribution network.

The savings are achieved through lower interest charges and storage costs, reducing the order-to-delivery times. 'Europe on the Move' claims manufacturers can enhance their brand values and differentiate their vehicles through reforming their distribution processes, although this will require different strategies for prestige and mainstream makes.

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