Vehicle Supply Chain Explained S4 E11

In this episode we investigate vehicle supply chain and how vehicle over or under supply can easily happen. We review how the import of vehicles into Australia and the impact of vehicle supply can have a significant impact on dealers. We find out how it affects us all when it comes to sourcing our next new car or truck. If you are a dealer or OEM and are in automotive retail or just want to learn more about the industry this is a video for you. The vehicle supply chain is complex with many moving parts. Vehicle manufacturers have to estimate demand for new models years in advance and determine how many units to produce to meet that demand. However, accurately predicting buying behaviors and market conditions so far ahead of time is challenging. This can easily lead to oversupply, where too many vehicles are shipped to dealers creating an excess of inventory. Or it can lead to undersupply, where not enough vehicles are available to meet customer demand. Oversupply is problematic for dealers and manufacturers. It ties up money in excess inventory that sits on lots for extended periods. This impacts cash flow and profits. It also reduces the perceived value of the vehicles in the eyes of consumers. Undersupply is also an issue, as it results in lost sales opportunities and reduced customer satisfaction. The key to avoiding over or undersupply is improving demand forecasting using both historical data as well as real-time market insights. Manufacturers should also build more flexibility into production to allow for adjustments based on changing conditions. Dealers play an important role in managing supply as well, by providing timely feedback and data on local market demands to help better match vehicle distribution with regional customer needs. With a complex global supply chain and many factors influencing vehicle demand, some degree of over or undersupply is inevitable. However, with improved planning and coordination between manufacturers and dealers, the automotive industry can significantly reduce excess inventory and boost customer satisfaction. By better aligning vehicle supply with real market demand, both dealers and manufacturers will benefit.Become a supporter of this podcast: https://www.spreaker.com/podcast/talking-business-with-mark-and-john--5696935/support.