The Journey of Cars from the Factory to the Dealership
Introduction
Car manufacturers and dealerships have a complex logistics network to ensure that vehicles reach the dealerships and customers. This process involves various modes of transportation, from ship to train to truck. In this article, we delve into how cars typically make their way from the factory to the dealership, highlighting the importance of sales and inventory management.
Transporting Cars to Dealerships
The transportation of cars from the factory to the dealership is a multi-step process that often begins with oceans and ends with roads. If the cars are manufactured overseas, they are usually shipped on RORO (Roll On, Roll Off) ships. After arriving at the port, the vehicles might be transported by truck, rail, or a combination of both.
For instance, the car I purchased was transported from Ulsan, Korea, to the USA via a ship and then by truck to the port of Philadelphia, before being delivered to a dealership in Maryland. The journey was even noteworthy as the car passed through the Panama Canal while I made a deposit, indicating that it was still on the ship at that time.
New Vehicle Allocation
The process of receiving new vehicles starts long before they leave the factory. Each dealership receives an allocation, which is essentially a quota based on their recent sales performance. This allocation is determined by the manufacturer and reflects how well the dealer has been able to sell vehicles over the past 60 or 90 days.
Dealerships with higher sales volumes are more likely to receive more units in the next allocation. Manufacturers aim to keep dealers supplied with new inventory, and dealers who report higher sales figures get priority in receiving fresh units.
Importance of Customer Satisfaction
Customer satisfaction is crucial for dealerships. A key belief in the automotive industry is that if a customer has a good experience and likes the salesperson, they are likely to return to the same dealership for future purchases. This belief underscores the importance of making a positive first sale. Therefore, dealerships strive to provide an excellent experience to ensure continued patronage.
Franchised Dealerships and Inventory
Franchised car dealerships typically receive their new vehicles directly from the manufacturer. However, if inventory is limited, they may engage in dealer-to-dealer trade or purchase from another franchise dealer.
Used cars, on the other hand, are sourced from various channels such as trade-ins, auctions, and lease returns. The current scarcity of used cars has led to situations where dealerships resort to offering older models to customers who might have purchased a car two years ago.
Transportation of Used Cars
Used cars are typically transported using semi-truck car carriers. These carriers can haul up to eight cars at a time, although a rail head just off the back lot is an unlikely scenario in this context. Trucks are the preferred mode of transportation for used cars due to their flexibility and ability to travel shorter distances.
Ordering Vehicles from the Factory
For new cars, dealerships order directly from the factory of the brand they represent. This process ensures that the dealership receives the specific models and configurations they’ve negotiated over. Used cars are acquired through auctions, often held by reputable auto brokerages or manufacturers.
By understanding the logistics of car transportation and inventory management, customers and dealers can better navigate the modern automotive marketplace. Whether you're a first-time buyer or a seasoned automotive enthusiast, knowing how vehicles arrive at dealerships can add to your overall satisfaction with the car buying process.