Review About Automotive Industry

Automotive dealers have a number of objectives to meet with respect to stock levels. These include maintaining the right level of stock inventory, minimising stock holdings, keeping stock costs to a minimum and maximising efficiency in stock use. A consistent ordering process reduces business pressure to meet stock levels and allows dealers and distributors to manage the exceptions to stock levels as opposed to moving from one crisis to the next.

Without an efficient forecasting process in place a dealer will simply aim to minimize stock holdings. However, if dealers are not forecasting correctly, stock levels will be incorrect. There are obvious inventory costs in holding too much stock but at the same time, too little may require emergency orders. Dealers who require such emergency orders bear not only higher costs of stock purchase but also increased freight costs. In addition, dealers have traditionally decided not to order extra stock because, in the event that the dealer is unable to move that stock within a reasonable time frame, there may be a higher cost of managing and warehousing inventory.

An efficient forecasting system assists both the distributor and dealer to reduce costs by providing a consistent, predictable and reliable basis for stock inventory. There will always be unforeseen circumstances, but these can be managed as exceptions as opposed to normal business processes.

Distributor versus dealer forecasting
A new system, pioneered and functioning well in Europe, gives distributors, rather than dealers, ultimate responsibility for forecasting stock requirements. By analysing trends in stock ordering across all dealerships, the distributor is better able to forecast, taking a broad view of requirements, predicting the expected stock requirements of dealers and advising accordingly. For example, following the release of a new vehicle model, patterns may emerge in high volume metropolitan locations. These then provide valid information on trends as the volume increases in other locations, such as in country areas. The distributor can advise or make certain components compulsory when a new dealer starts up or a new model is introduced into a new area.

Under this new system a dealer is obliged to purchase a certain level of stock because the distributor wants to ensure that a dealer has a basic set of components for a particular vehicle model that will cover most situations. Distributors understand, through trend analysis, the frequency with which components will be used and are in a position to advise dealers about the components that are to be maintained.

There has been slight, initial resistance from the dealers in the implementation of this system. The major issue has been that the distributor is basically instructing the dealer as to the stock that has to be purchased. However, as the distributor now accepts a greater risk by allowing the dealers to return unused stock within an agreed period or to increase or in some circumstances reduce quantities, resistance has been greatly reduced.

The advantage to the dealer in agreeing to those recommendations is that many dealers today would not stock all the recommended parts due to the cost of maintaining inventory and the fact that it could not be returned to the distributor if it was not used over a given time. Essentially, the dealer manages the inventory risk and their behaviour reflects that risk.

Free flow of information within the network
The key to successful dealer forecasting is the free flow of information between the dealer and the distributor. Dealers provide information about their current stock levels and the demand for stock items and the distributor can understand the stock patterns that the dealer experiences. In a well functioning dealer forecasting system most of the risk of maintaining inventory is with the distributor, not the dealer.

The distributor has a broad visibility of stock levels across all dealerships and in certain circumstances it is possible to open up the visibility between all dealerships. A dealer enquiry for a part can reflect both the distributor stock and the dealer network stock. Generally, a dealer will be able to see only the distributor stock and if that has been exhausted, a dealer may be allowed to view the rest of the stock. Distributors encourage dealers to buy from the distributor first, and then buy it within the network. When buying within the network the supplying dealer accepts the order and is credited from the distributor. The receiving dealer is charged for the stock from the distributor. The distributor can then monitor the demand between the two, and adjust the system for that demand later on. The distributor can then analyse whether a dealership is using more of a particular stock than expected, and can adjust the dealer’s forecast accordingly.

Contingency for emergency orders
The primary goal in any stock control process is to reduce emergency order frequency. An efficient warehouse process, where dealers place more stock orders and less daily or emergency orders reduces pressure on the entire distribution and dealer network. The dealer forecasting system, together with an optional distributor buy-back strategy, goes a long way to achieving this.

Dealers are encouraged to stock a greater range of parts, based on the analysis gained from a consistent forecasting process so that they can fulfil their customer requirements efficiently and cost effectively. The distributor gains the benefit of knowing where parts are located throughout the dealer network and a more efficient warehousing operation.

There are some quite significant benefits to both distributors and dealers of a dealer forecasting system. Distributors and dealers in Europe that have engaged this model are experiencing significant upside to their business and are now more able to meet customer requirements as well as having a more consistent and predictable inventory process.

The free flow of information between the distributor and dealer is enhanced with a dealer forecasting system. Distributors understand the amount and frequency of all stock requirements in the system. There is an ability to move stock using both the distribution and dealer network. The dealer however has reduced risk in stock holdings and so is more likely to retain a greater variety and number of parts to satisfy customer needs.

Summary
Consistent and predictable information flow between a distributor and a dealer can be achieved through an efficient forecasting system. A distributor, having access to a broad view across all dealers, can provide in depth analysis of stock usage, inventory and future stock requirements. A distributor is then able to provide accurate advice to dealers on the type, amount and availability of stock required based on factual data.

Cost reductions throughout the supply chain process are realised for distributors and dealers through a more streamlined forecasting system. Facts can dictate how much stock is required across the entire dealer network and the expected usage rates by each individual dealer. Total stock inventory is reduced, availability immediately known and the ability for the distributor to deal with emergency orders is greatly enhanced. For both the distributor and dealer, inventory and warehousing costs are reduced while a reduction in frequency of emergency orders results in less freight and delivery costs.

By: Ben Portelli

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Imagine what our lives would be if there were no vehicles in our life? You would have to walk a long way, ride a horse or a carriage. Visiting family and friends would be a difficult, no proper roads would have been constructed and we would have to limit our travels anywhere.

It is really hard to imagine what our lives would be without the thing that we now take for granted. Let’s keep in mind that the automobile has really changed the way we live our live.

With the onset of the machine age, the world has seen a new turning era, which we are all thankful for today. The automobile has a great impact on how we live and work, transporting us and our goods anywhere. A network of highways have been built, fuel stations have emerged and people can choose to stay far away. It has made the world smaller for us.

The American automobile culture has been featured in songs, poetry, films and literature. It has become a part of our day to day life. It also has a great impact on our economy as well. Cities have grown, suburbs have popped up and going anywhere is possible.

No other invention has touched a great aspect of our society as much as automobiles have. Our entire lifestyle has completely change, it has altered our economy and redefined our everyday life. Without automobiles, our world wouldn’t be anything like it is today.

The automobile industry has become a crucial element in today’s economy of many industrialized nations. The production and sales of automotive are the major indicators of the economy status of most countries. The special requirements of mass production of automotive has a great influence on the design and development of highly innovative machine tools, which engineers strive to refine now and then.

Now, let’s talk about the employment opportunities that it brings with it. Being a part of this industry is a dream for most people. There are also so many career options in this industry as well. From auto technician jobs, store manager job, automotive mechanic jobs to automotive service manager jobs, there are so many that you can try for.

It is a thriving industry and it is attracting more and more diversified professionals. There are millions who are employed in this industry every year. You can try your luck if you are really interested.

By: Gaurav Dabhade

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The first edition of this article was written in early December while the U.S. government was still considering whether or not to bail out the Big 3 – Ford, Chrysler and GM – with taxpayer money. That bailout has gone through and now we are faced with a second issue: bankruptcy.

The current debate rages over whether such a “controlled bankruptcy” will be beneficial in the long-run for the automotive and manufacturing industries, or whether it will simply push them past the point of no return. While we contemplate the pros and cons of this move try to understand that this issue is by far more complex than simply bailing out a failing industry, as we will see.

Pro #1: As President Obama has said, the systematic bankruptcy of these auto giants will allow for the restructuring necessary to make a more fuel-efficient automobiles and help ease the shift to greener forms of energy in order to limit our dependence on foreign countries for our energy supply. The pros from this move are obvious. If this restructuring is successful, Obama may be correct and the U.S. may be capable of shifting towards more fuel efficiency and producing fewer greenhouse gases.

Con #1: While glorified in theory, and only in the long-run, the above point basically ignores the fact that the U.S. automotive and manufacturing sectors will suffer near-death experiences in the short-run. Especially since that is basically what bankruptcy means. It is a type of death certificate. As these industries are restructured over time, and while jobs are theoretically being created, those sections of employees who specialize in skills which are being cut-back will find themselves on the street, so to speak. The day-dreaming about “what will be” leaves out the whole part of economic anarchy in the short-term. This simply cannot be ignored.

Pro #2: In light of the first article, one pro of allowing bankruptcy would be to finally deliver a type of punishment to an industry which has been slow in developing more efficient technologies due to self-deception and a sense of invincibility while the rest of the world was blowing past into the field of green energy vehicles. This may be the sanction that was long overdue to large, bloated, inefficient companies which are oh-so-symbolic of this recent financial crisis and recession. Chalk this up as a victory for the American taxpayer (that is, of course, if you call bailing out a company that later declares bankruptcy a victory).

Con #2: While this bankruptcy scheme appears to be a long-term savior of an inefficient industry, the truth is that its success is highly dependent on outside factors. The success of green energy cars depends on there being a demand for them. Demand for these vehicles increases when gas prices sky-rocket. However, during this recession Crude Oil has fallen off its peak of $147 a barrel last July to hover around $50 a barrel today. Without a dramatic increase to gas prices like we saw last year, the demand for greener vehicles will simply not exist. Second, American cultural mentality places a value on the status achieved by owning a large and powerful vehicle. If hybrid, or other green energy vehicles do not possess the same attached status, they will not be very successful.

These merely demonstrate a few of the complexities. If these requirements are not met, a forced bankruptcy and subsequent restructuring will simply hammer the final nail in the coffin of the American automotive industry.

By: Greg Holden

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There is no question that the automotive industry has become one of the most important commercial sectors in the world today.? However, many people fail to realize all the specific elements that make up this sector.? From manufacturing to consumers, there are many important steps a vehicle must travel through.? In fact, one of the most important, if often overlooked, components of the automotive industry are dealerships.

Dealerships serve as the essential middleman between an automobile manufacturer and the consumer.? At a dealership, sales professionals are employed to explain vehicle options to potential buyers and ultimately facilitate the transfer of ownership.? Both used and new automotives can be purchased at a dealership, and the thousands such facilities worldwide make up the major source for vehicle sales.

Automobile dealerships generally stock a wide range of vehicle options.? They are also able to customize products with special orders to suit a consumer’s specific needs.? In general, dealerships stock such vehicles as motorcycles, cars, light trucks, vans, and some water sport devices.

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Perhaps one of the most vital roles dealerships play is in determining the actual selling price of a vehicle.? Unlike other products, automobiles are fairly flexible in terms of the buyer’s power to influence how much he or she will pay.? Negotiating a “good deal” is an essential component of the vehicle purchasing process at a dealership.? Thus, the dealer must be aware of various market considerations to ensure a profit is made without losing consumers to competitors.? Dealerships may also offer leasing options.? This allows them to retain ownership of a vehicle and temporarily rent it out to a user for a period of several years.? This provides consumers with a more affordable option for accessing an automobile.? It also gives the industry access to people who otherwise would be unable to spend income on an automobile.

Once a consumer decides to purchase an automobile from a dealer, he or she must also use the dealership to facilitate financing.? Most vehicle purchases are not made in cash.? Rather, they are paid on a set schedule for a number of years.? Instead of procuring a loan from a separate lending institution, most dealerships provide financing services through participating partners.? This can be done simply at the dealership without much pressure placed upon the consumer to investigate several banks.? Additionally, some dealerships help consumers procure automobile insurance and appropriate license plates.?? Thus, dealerships become “one stop shops,” for automobile purchases.? This is not only a convenience for customers, but also helps increase automobile revenues.
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In addition to facilitating sales, dealerships are a consumer’s primary resource for vehicle care.? Most dealerships offer mechanical services to vehicle buyers for years following the initial transaction.? This helps keep consumers active in the automotive economy even beyond the actual purchase of a vehicle.? This provides considerable numbers of jobs in the automobile industry for those who understand vehicle mechanics.? Subsequently, dealerships help expand the automotive sector in yet another way.

Ultimately, dealerships are an integral part of the automotive business.? They play a number of important roles that are necessary to the survival of this industry.? Without dealerships, it is unlikely automobiles would be as accessible to the general consumer public.

By: Hani Masgidi

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The automotive industry is advancing in technology every year and seeking an education in the highly specified field can turn a passion into a career. Automotive online training will prepare an individual by exploring all the areas within the industry. This includes design, development, manufacturing, and more all relating to the parts and function of a vehicle.

This professional field is specifically focused and students have to prove they have learned the necessary skills. Automotive service technicians have to show they know how to diagnose, understand, and fix automotive troubles. In addition students will need to gain practical experience in the industry. Individuals who complete an accredited online program will walk away with an Automotive Service Excellence certification.

There are a number of online accredited automotive schools for people to gain ASE certification and prepare them to enter the work force. Students can choose from general programs that have an all-encompassing course load or choose a specific program to gain their certificate. Students can enroll in an Auto Repair Technician program and learn the necessary skills required for this career from home.

Auto Repair Technician courses will include electrical systems, exhaust systems, fuel systems, computerized engine controls, braking systems, transmission components, and automotive engine disassembly, repair and rebuilding. By gaining the credentials to be a technician students upon graduation can work for established garages or start their own business. Certification can take on average a year or longer depending on the students schedule.

The price for a program like this will cost approximately $800 from start to finish. This price includes all textbooks, study materials, and course supplies needed to complete the program. Many of the automotive online schools have different options for payment. Students can pay either in full at the time of enrollment, choose automatic payment, which will establish payments to automatically be charged to a credit/debit card, or a standard payment plan may be set up.

Through 3D animations, 2D illustrations, video instruction, broadcasts, and other technology students will learn the ins and outs of automotive mechanics and repair. These skills will allow students to be able to work in a number of professions. With numerous specialties students will be in high demand and will be paid accordingly for their services.

Students have to be certified before entering the work force. ASE exams prepare students for all major technical areas of repair and service. With the number of certified professionals reaching almost 400,000 the ASE program is accepted and nationally recognized. Students should enroll in an accredited program if possible. ASE professionals can be found at all types of repair facilities, dealerships, service stations, part stores, and garages.

The certification tests the competency of the individual technician not the repair facilities. The exams have been developed by leading industry experts and will ensure that a recent graduate has obtained the correct knowledge to perform their job duties. Exams are broken down into specialties. Eight exams exist for individuals seeking to be an auto technician; other exams cover collision repair technicians, engine machinists, parts specialists, and more. Technicians in every field of work have to re-certify every five years to stay current with the leading technology in the industry and to remain eligible to work.

DISCLAIMER: Above is a GENERIC OUTLINE and may or may not depict precise methods, courses and/or focuses related to ANY ONE specific school(s) that may or may not be advertised at PETAP.org.

Copyright 2010 – All rights reserved by PETAP.org.

By: Renata McGee

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If you are in a competitive industry, like the automotive industry, then you should consider investing in automotive internet marketing. Whether you are a mechanic or car salesman internet marketing can give you an edge in a competitive market.

The first step to get on board with internet marketing is to have a great website. You should go to a qualified website designer who can ensure your website is functional, informative, aesthetically pleasing, easy to read and easy to navigate.

Once you have a website in place with functional and informative landing pages then you will want to design a pay per click (PPC) campaign. Pay per click ads appear on the left side of Google, and are how internet browsers like Google make profit. The price of these ads vary depending on the popularity and competitiveness of the keyword you are paying to target, so you need to do some effective and thoughtful keyword research before you set up your PPC campaign. The nice thing about PPC is that you only pay when someone responds to the ad. Also, you control the budget – so if you only want to pay for 20 clicks a day then the ad will disappear once you’ve reached your quota and then will reappear the next day until your maximum daily budget has been used. With PPC you can also target certain users in specific geographical locations. So if you want to advertise to people who work from 9-5 in Toronto, then you can set your ads to display to users in the Toronto area from 6 – 10 pm in the evening.

An excellent advantage to PPC is that you will get detailed analytics about how your ad campaign is doing. This will allow you to make changes to how you are targeting certain markets and the keywords that you are using in order to maximize the effectiveness of your campaign.

After you have your PPC campaign in place you should consider adding search engine optimization (SEO) to your marketing plan. Search engine optimization is a way to ensure that your website has a good ranking on Google and will appear at the top of search engine results. There are a number of ways to conduct SEO and it usually takes a lot of expertise as well as time and dedication to notice an impact. However, once you have SEO in place and working effectively then you will notice a difference in the number of website visitors.

Once your SEO is in place you should also consider adding a social media strategy to your internet marketing plan. A social media strategy will target social networking sites like Facebook, LinkedIn and Twitter. Because there are so many users on these sites daily it is a great way to find and interact with potential and current clients. Also, blogging is another great way to improve your social media strategy. Blogging daily will help drive new traffic to your site and improve your website’s ranking.

Automotive internet marketing will help you to gain an edge in a competitive industry. By getting on board with an effective internet marketing strategy you can generate new leads and business.

By: Denise Gervais

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Change and learning often come in pairs, although not always at the same time; learning from previous experiences may lead to change…

The case is that of the Chrysler and Fiat alliance. It is an operation that doesn’t involve cash. This seems logical in these “cash-is-king” times. Chrysler will cease 35% of its capital to the Fiat group. In return the Chrysler group will “receive access to technology to develop smaller and more efficient cars.”

This is a deal that can be profitable for both in times of crisis. Fiat wishes to return to the US with additional business beyond the present market for Masserati and Ferarri targeting a potential “return of Fiat and Alfa Romeo.” And Chrysler is looking for fixing a gap in market demand and current supply for smaller and less consuming cars. Details about how this could work are obviously not revealed. Additionally, a synergy effect is calculated to be about 3,5 billion dollars.

This new picture seems promising when comparing it to the previous merger. First of all this new structure is not a merger. That is probably one of the lessons from the previous deal — a merger — with Daimler (Daimler still has a stake of 20% in Chrysler and is not sure what to do with it). A logical reason to choose for an alliance above a merger is due to the severe market conditions which limits the budgets on both sides. But also the lessons learned with the previous merger help to this new approach: first a partnership (alliance) to remain flexible and open for any next step. A wait and see strategy without the expensive integration of systems and methodology that was the case in the previous deal.

What also has changed is the market-configuration. At the time of the Daimler-Chrysler merger the focus was still on growth whereas the focus is now more on “survival of the fittest” and (thus) building smaller cars can offer a competitive advantage.

Then the cultural lessons. Fiat and Chrysler offer a better match in complementing each others cultures where both producers complement each other in the overall product catalog; this was not too clear in the previous merger where both automotive producers were engaged in a similar type of business.

Culture becomes an issue when a single business is managed with different backgrounds. With a complementary business like in this case there is no cultural issue other than learning how smaller cars can be produced (on the Chrysler side) or how the Italian cars can be sold in the US.

Although then the question is, once the market is recovering and Chrysler knows how to build smaller cars, how will that fit the situation where also the Italian cars are to be sold in the same market? There remain some challenges. (Like that of the synergy-effect of 3.5 billion) But that’s why a partnership seems a good match for the moment. It leaves enough space for future developments on either side. It also fits the current risk-culture where what matters most is solving today’s problems. The future in the automotive industry is still far away. But this deal sheds some light on where things are heading.

By: Hans Bool

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For years, the auto industry has touted the use of and need for steel in trucks, cars, and sport utility vehicles. Then, the public began asking for a more fuel efficient, less emissive, and cheaper vehicle. Newer, more environmentally sound cars are answering this call. Surprisingly, they have accomplished this without the use of the industry’s beloved steel. The kicker is that consumers didn’t notice the material switch.

The Mysterious Steel Substitute

Contrary to belief, magnesium alloys are much lighter than steel, cost less to fabricate, and make cars much more fuel efficient and “green”. The alloy is all of the following:

A quarter of the weight of steel, but just as strong. In fact, magnesium is the lightest of all metals used to build cars, buildings, and other structures like bridges. More impact resistant. Magnesium alloys absorb more of the impact’s energy. They are therefore more resistant to dents. The dampening capacity or ability to reduce noise and vibration is also much higher than that of steel. Magnesium is less rigid and bends easier than steel, making it easier to fabricate.

The alloy isn’t actually new. It was discovered in 1755 by Joseph Black and isolated in 1808. The search for a more efficient and abundant material has led researchers to experiment with magnesium alloys in the place of the more traditional materials like steel that doesn’t perform as expected. The aforementioned factors have made the alloy a newfangled contraption in the auto industry.

The Faces of Magnesium in Automotives

Some of the first uses for magnesium in automotives were inside the car. Die cast steering columns, engine blocks, and chassis were just some of the uses for the alloy in cars. The vehicles were much lighter, used less gas, and had less emission as a result. Eventually, seat frames, dash panels, and the track that held the sunroof were also cast from magnesium. Naturally, the next step became taking the alloy to the outside of the car.

Magnesium alloy sheeting made roof panels, hoods, oil pans and other outer elements of the common car lighter, stronger, and more resistant to impact. Expense was a concern for the die casting process, but the sheeting is less expensive because it requires less compression force to create, allows for parts consolidation and simpler designs. In addition, magnesium alloys have a shrinkage rate that is very predictable and less energy is required to make the sheets.

The alloy is thus a step above steel, without a sacrifice in safety. One of the common misconceptions is that cars made from magnesium alloy as opposed to steel are less safe. You now know that the opposite is true. Magnesium alloys may just replace steel completely in the future.

By: Nancy Millani

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There is a huge need for advertising in the automotive industry. In the US, the automotive sales generated a lot of income and automotive industry was a booming industry until recently when it was hit by the economic slowdown and rise in oil prices. Different car makers vied for market share that diminished as the tremendous purchasing power associated with the consumer market declined after the economic debacle. This set back increased the importance that advertising traditionally held in this business field.

Dealers on an average spent huge sums annually on advertisements, a tenth of which went into direct mail marketing. Direct mail marketing is an important marketing strategy adopted by auto dealers who look to retain existing customers by periodically offering them revised rates and discounted prices on spare parts as well as first choice on buying new models that arrive. They also seek to gain new customers by flashy advertising which is personalized enough to generate interest.

The good thing about cars is that people like looking at them and at pictures of them. If the car is beautiful, more often than not, you would find people staring at it and viewing its pictures in an automotive magazine with great interest. Including aesthetic pictures of new models of cars that are available for sale at the dealer’s showroom in the direct mails that are sent out, could result in increase traffic generation to the showroom. Those who are genuinely interested might pay a visit to take a look at the new models, lured in by the glossy pictures that were printed on the catalogues. It is wise to include the highest market prices for the cars. Including the prices that a particular dealership is ready to offer to a customer in order to highlight the economic advantages of doing business with them, is a great idea for boosting sales.

Direct mails can also include description and pictures of genuine spare parts of older models that might be useful to existing customers. Personalizing these direct mails that are sent to existing customers would result in awakening their brand loyalty and in enticing them to pay a visit to the dealer or recommending them to a friend.

The important factors to be considered while looking to market a dealership is to choose the right kind of mail list vendor. The dealer might already have a list of existing customers whom he would want to target. In addition to this, a list of individuals who might be interested in buying a car and who need to be targeted through direct mail marketing has to be made.

Since these new prospective customers are not aware of the dealership and its merits, it would be a good idea for the dealers to introduce themselves and personalize the whole thing. The direct mail could be an invite coupled with catalogues and brochures. The catalogues would contain competitive prices and pictures, while the brochures for new models would contain glossy pictures that look inviting as well as detailed feature description of the models that are available.

By: Daniel Bernal

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