WORKING CAPITAL

Most automotive battery manufacturers experienced difficulties with availability last year. The problem was a lack of cash to build stocks in the summer period ahead of the winter demand. This problem will be significantly worse this year as pressure on working capital increases.

Cash constraints play a major part in determining such companies strategies. There is insufficient cash in their business to build stock in the summer for the demands of the winter. This results in demand exceeding supply at this busy time of year when it is not uncommon for such manufacturers to be holding just a few weeks stock. This strategy could be critical for your business and will almost certainly lead to lost sales as a consequence!!

There are cash flow restrictions and limited stock allocated per country. This limited stock situation results in stock only being distributed to customers who meet a specific criteria in terms of the volumes they purchase. This results in a highly priced offer to the market, with a high probability of non availability during the peak season.