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Is vehicle distribution a commodity or a marketing advantage

Is vehicle distribution a commodity – albeit a quality commodity – to be bought on price? Or is the outbound supply chain a key contributor to the customer satisfaction which creates brand loyalty among car-buying consumers?

Speakers including Toyota Europe’s Levent Yuksel, Fiat’s Paola Petrone, Daimler’s Egon Christ, SEAT’s Manuel Medina-Burrull, JCB’s Joannes van Osta and John Deere’s David Panjwani will address this key strategic issue at the 2011 ECG Conference, to be held in Paris on October 13-14.

ECG, the Association of European Vehicle Logistics brings together carmakers and the community of service providers at its annual conference. Yuksel, Petrone and Christ are the senior executives responsible for their respective companies’ vehicle distribution across Europe.

Conference delegates meet this year at a time when car sales are up, but where there is a shortage of the distribution needed to move vehicles from assembly plant to dealer. This is due to a lack of investment, according to ECG president Costantino Baldissara. He warned recently that, logistics providers must invest at least €5 billion ($7.25 billion) in car carrier ships, trucks and rail wagons to move capacity back to pre-crisis levels.

"Rates are not moving in line with the costs of vehicle logistics," he said. "I’m afraid that in the next 12 months, unless there is another economic shock, there will be a lack of vehicle logistics capacity because companies do not have the resources to invest."

Egon Christ, senior manager for worldwide distribution at Daimler commented "There is currently what we could call a ‘fight for capacity’ in Europe with a shortage of trucks and drivers," he said. "The outlook for sales and production is good."

But, he added, logistics service providers are not investing to replace the capacity withdrawn or scrapped during the recession. "There is really no reason not to invest," he said, though he went on to add: "We recognise that many in the sector have a lack of confidence and trust, and this is holding back investment."

This lack of confidence, and the reasons for it, are confirmed by Costantino Baldissara.

"Our members still do not feel confident enough to invest in new capacity," he said. "Financing is not the issue. Very few respondents to ECG’s latest quarterly survey of members indicated that they are unable to raise funds from the banks. But some 70% cited lack of confidence in their ability to obtain viable future rates."

Christ has acknowledged that many of the distribution contracts in place today were signed when carmakers were in crisis mode in 2008-09.

Fiat’s Paola Petrone commented: "In the last year many small vehicle logistics companies in Europe went down. It could be a problem going forward as the market recovers." But she added that Fiat may see a solution in the expansion of its own distribution service, iFast Outbound. Carmakers distributing their own vehicles is not the norm, but could be an option, observers say.

The Paris meeting will not be exclusively about cars. The so-called ‘high & heavy’ sector, which distributes everything from excavators to agricultural vehicles, will also be the subject of one of several break-out sessions of the conference. Joannes van Osta, General Manager, Group Transport and Logistics of JCB and David Panjwani, Manager, Logistics EMEA of John Deere are already on the roster of speakers.

The one-day conference will be held at New York Hotel, Disneyland Paris on Friday 14 October, preceded by the networking conference dinner on the Thursday evening. Disney’s facilities have been used by Microsoft and other blue-chip companies for their ease of access and their flexible facilities and accommodation.

As well as formal conference sessions, and the dinner, there will be other extensive networking opportunities, supplier displays, and a social programme to support the creation of all-important business relationships.

The conference is being held with support from Premier sponsor GEFCO, from Gold sponsor Lohr, and from Silver sponsors Aral, BallSystem, CargoTel, Inform and Vehnet.

Previous ECG conferences have been held in locations which emphasise the breadth and size of Europe’s car market, including Berlin, Rotterdam, Barcelona, Vienna and Istanbul.

For further information and to register please visit: www.ecgconference.com

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