The South Korean electric vehicle provider, CT&T, who produces two-seater city cars and other small electric utility vehicles, recently announced its entry into the U.S. market through its new subsidiary, CT&T United. This new joint-venture also includes Japan’s PUES Corporation.
I recently noted postings on both the autoblog and Procurement Leaders blogs, commenting on CT&T United’s new Regional Assembly and Sales System (RASS) process approach
David Rae noted on Procurement Leaders in his headline that this process was “as revolutionary as Just in Time manufacturing.” Sebastian Blanco noted on autoblog that the RASS idea is to invest $8 to $10 million on each regional facility. He quotes CT&T Chairmen and company founder Young Gi Lee that the RAS system has the potential to revolutionize the auto industry the way Toyota’s just-in-time parts delivery did by “regionalizing manufacturing and sales and allowing us to offer EV’s at an incredibly responsive price point.”
Without knowing more about the details of this process, I’m not inclined to as yet go along with that bold of a headline, but I do applaud more creative thinking. My sense is that this process may be similar to that of providing finished goods assembly kits that many Asian based manufacturers practice when they extend sales presence to other countries. The process essentially avoids the need to establish a large capital or inventory investment in component production or supply chain resources until volumes warrant such an investment. This process may possibly be different in that the context is a much smaller vehicle which hopefully not includes a complex supply base as larger gasoline powered vehicles. The other issue would be where most of the finished materials are being shipped from.
In a past posting, Lessons of the Tata Nano and Rethinking Big Three Supply Chains, I noted the novel means that Tata Motors utilized around supply chain process to meet the goal of building a $2500 vehicle with a small margin. The Nano ships as a kit to a local facility, where it is assembled. Similar to the challenge I issued to the big three U.S. automotive OEM’s, perhaps CT&T has indeed embraced new thinking in supply chain and distribution.
I would certainly like to hear more about the RASS process and I’m asking CT&T as well as my readers to share what specifics they have heard. Readers can post in the Comments section related to this posting.