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Production volumes in check but some vehicle manufacturer profits soar

By Jack Regan, 07.08.13
Posted in: Business News | Manufacturer Profiles | Public

Interesting views from Ferrari and Porsche as the mid-year financial performance is declared – both have strong sales, but are aware their markets are slowing. For volume manufacturers the slowing rate of market expansion pace in China along with an apparent cyclical downturn in the Russian market. Broadly the un-expectedly strong North American market, continuing growth in China and recovery in Russia has offset the effect of the European down turn which is now in its fifth consecutive year.

Why should the collision repair market care?

Some manufacturers were very badly damaged by the events of 2007, with further damage caused by natural disaster as well as political upheaval since. The damage was deep with entire new model programmes cancelled as well as cut-backs in day-to-day parts support. The result is minimal stock of new cars for delivery and almost any spare part which is not a regular service item goes onto ‘back order’. Operationally this has offset the efficiency gains made by the collision repair business.

The heads up? We are going into a second phase of this process, compounded by the fact that apart from the UK, much of Europe will not feel any further negative change. Expect yet more body repair parts to go into the ‘on demand’ delivery system, and tightening of new vehicle supplies as manufacturers enjoy the benefits of strong demand with limited product supply. It is not a buyer’s market right now…

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