Automotive Purchasing Weekly 16 November 2015 - page 2

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A Publication
E. & O.E. © 2015 Three 6 Zero Limited - Automotive Purchasing
Simon Duval Smith -
Alex Kreetzer -
Who really likes the process of buying a car? We love
to drive them, but no one wants to spend hours filling out
paperwork and bartering in dealerships. Would it not be
easier if we could pick our car up the same way as we
would buying something from a vending machine?
An online American car retailer called Carvana has
an answer, after manufacturing a five-story-high glass
vending machine to replace chocolates and fizzy drinks
with 18 full-sized vehicles for its awaiting customers. After
buying the vehicle on the company’s website, customers
are then told to decide on a convenient time when
they can pick up their car, as there is no need for any
salesmen. After inserting a unique novelty-sized coin, the
car is then robotically placed onto a track that transports
it to the delivery bay, ready for the eager customer to test
drive before taking it home. The whole process is said
to take around a 10-20 minutes, which drastically slashes
the time of the average car purchase - I can tell you, it
beats spending most of your day sitting in a Fiat Chrysler
showroom, drinking sub-par coffee and conceding to
exasperating small-talk.
Carvana has, unsurprisingly, taken inspiration
from Volkswagen’s iconic Autostadt in its Wolfsburg
headquarters, built through the automaker’s decision to
introduce an automobile theme park to strengthen ties
with its customers. Now, companies around the U.S. like
Carvana are looking to follow suit, which could spark-off
a new trend within the industry, with Europe and Asia
also intrigued. The oversized carnival attraction could
eliminate the need for the traditional showroom, creating
an exciting experience for customers rather than one that
drags. A structure like this would also highly benefit ’car-
sharing’ programmes that are becoming more common in
society, where people could borrow vehicles from these
machines, returning them when finished for the next
On the other end of the stick, automakers will be happy
with these cost-saving methods, not having to spend up
to $25 million on building dealerships or £2,000-£3,000
on running costs per sale. By supplying customers with
a website to go through the process of figuring out
financing and scheduling a pick-up time, along with a
longer test drive than the 10 minute
slot you get at a dealership, these
vending machines will spread all
over the world, especially if OEMs
get involved.
Sam Ogle -
At our Automotive Supply Chain Global Awards, held at
Claridge’s Hotel on Thursday 12 November, we celebrated
some tremendous achievements in the industry: in the UK,
Europe, and all around the world. I had some fascinating
conversations with OEM and Tier supplier executives,
regional development agency people and many other
industry experts.
I talked to an ex-GM executive at length and we debated
the future of that extraordinary car company, Lotus. My
dinner neighbour was at GM when the US giant was
Lotus’s parent and he talked of his frustration at the way
the ‘General’ did not really understand the ethos of the
sportscar maker, and did not fully exploit the extraordinary
amount of imaginative engineering talent there.
Since the GM days, we have seen Lotus lurch from
one owner to another, none of whom seem to have really
grasped what makes the company so special.
And former CEO Dany Bahar’s dream, which quickly
became a nightmare and probably his nemesis, of pushing
the brand upmarket with five supercar concepts, with their
own brand engines, was completely at odds with founder
Colin Chapman’s mantra of ‘simplify, then add lightness’.
But now we see a real powerhouse of a leader in the
driving seat; Jean-Marc Gales is a super-salesman, he is
ex-PSA and Mercedes and seems to understand Lotus’s
core values and competences. Just as Chapman was a
consummate salesman and Machiavellian leader, so Gales
has introduced some tough working practices: senior
managers are expected to work until nine in the evening
if necessary, expenses and other non-core budgets have
been ruthlessly trimmed. But most importantly, Gales
rationalised the model line-up; the three existing models
- the Elise, Exige and Evora - have their own programme
managers, to ensure new variants are delivered on time
and to budget. Now while some might point out that all
the current models spring from the original Elise, debuted
in 1996, one should consider that Jaguar Land Rover,
Aston Martin and even Lotus’s arch rival Alfa Romeo
have followed the sportscar maker in adopting aluminum
and composite structures and the use of adhesives, all
innovations first seen at Lotus. Indeed the carbon fibre
tub of the Alfa Romeo 4C weighs in at 65kgs, against
the Elise’s 68kg aluminium body/chassis. Colin Chapman
would have been proud that it has taken the competition
nearly 20 years to catch up and now
Gales is the right man to steady the
ship and steer Lotus to a profitable
A look at some of the current issues in the automotive industry.
If youwant to have your say get in touch by emailing us at:
Talking Points
Peter Wooding
Group Editor:
Simon Duval Smith
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Alex Kreetzer
ASC Editor:
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Chief Marketing Officer:
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LovingChicago is like
I was once very fond of a girlfriend with a squint, one
eye looking at me and the other FOR me, but that was as
close as I got to a lover with a broken nose.
Ask any automotive logistics professional which U.S.
city gives him themost sleepless nights and the answer will
probably be Chicago. The most important railroad centre
in North America with more than 500 freight trains a day
operating in and around it, more lines of track radiate in
more directions from Chicago than from any other city. It
has long been the most important interchange for freight
traffic between the nation’s major railroads.
Amtrak, the intercity rail passenger system, recently
published a major report following an in-depth, year-long
investigation into Chicago’s chronic passenger and freight
train gridlock. Arguably the nation’s worst transportation
bottleneck, the congestion is estimated to cost the U.S.
between $650 and $800 billion annually. The automotive
industry is amongst those most affected. The report
reveals that automotive manufacturers are spending
tens of millions of dollars each month finding alternative
means of moving stranded vehicles or storing them until
rail service is available.
Even relatively short delays in and around Chicago can
have serious repercussions elsewhere. The classic ripple
effect of a train held up in Chicago can cause other trains
to slow or stop as far away as Los Angeles or Baltimore.
The root of the problem lies in Chicago’s rail
infrastructure which has not kept pace with the increase
in freight and passenger traffic over the last 25 years.
There is a shortage of capacity and a network which is
ill-suited to its purpose. The freight trains in the U.S. today
are too long to fit between most of the level crossings in
the Chicago area. This means that some trains have to
be held miles away in order to avoid blocking the road
system while they wait.
The historic problems associated with the Chicago
rail system have also been exacerbated in the last few
years by increased traffic between Canada, the U.S. and
Mexico, much of it automotive, since the implementation
of the NAFTA agreement.
Something needs to be
done and done quickly if
the situation is not to get
even further out of hand as
automotive volumes increase.
As for Chicago itself. I love it.
It’s my kinda town.
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