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Whole system needs 'smarter approach'

John Kiff, a director of the International Car Distribution Programme, has challenged the industry to develop a new and leaner approach to selling used cars, suggesting there was scope for a futures market.

“New cars are to be built to order and it follows that their entry to the used system can be accurately predicted,” said Mr Kiff at the 'Used car crossroads' Automotive Management spring conference.

Mr Kiff said it was essential to find ways of taking waste out of the system because of the continuing downward pressure on demand. There was little matching of used car supply to demand and cars spent too long in the trade.

The lean enterprise research centre, where Mr Kiff works at Cardiff Business School, is conducting a detailed appraisal of the strengths of the franchised dealership system.

Mr Kiff said information was becoming increasingly accessible to customers, the motor trade and business which would have an effect on the used car market. Pressures on movement (such as parking charges) and improving reliability in cars would tend to reduce used stock turnover.

“I expect a downward pressure on margins and we need to exploit new ideas. Perhaps we need smarter trading or smarter marketing, or a combination. Maybe we need some smarter thinking about the system as a whole.”

This was likely to mean a move from selling from dealer stocks to ordering new cars which met customer needs from a central point, or building to order. The next step would be a lean used car system, with the emphasis on customer value.

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