Impact Of Introduction And Management Of Leasing Channel On Car Sales Supply Chain

With the rapid development of our social economy, income of residents is increasing fast, which in turn leads to the continuous improvement of consumers’practical purchasing power. Especially in the car consumption industry, car was considered as the luxury to be consumed by the very rich people in the past. However, more and more people could afford the cars as the daily consumption goods. Moreover, some of consumers can not satisfy by only possess one car that brings them long time fixed enjoyment experience, they also hope that they could get much more convenience by possessing different cars according to their real requirements when they have short journey travel or business tripe. Therefore, the car leasing industry comes up quietly. Diversification of customer’needs also make the revolution of car selling channel. As for car manufacturers, besides obtaining profit from traditional selling channel, many of them aim to seek breakthrough from car leasing industry. In practical, many famous car manufacturing firm such as Toyota and Nissan have paid much attention to car leasing business, which can help them achieve more revenue compared to the past. Our paper first establishes a game model, and then investigates the influence that leasing channel has on the decision entities of car supply chain, which is introduced by car manufacturer. The final results show that bringing in leasing channel in car sales supply chain can not only enhance the cooperation between manufacturer and dealer, but also makes manufacturer profit more. As for consumers, the prices of new cars and second-hand cars in new channel are lower than those in traditional channel, which makes consumers get more profit from new channel. At last, every decision entity in car sales supply chain achieves the win-win goal. Next we studied the competition between the traditional channel structure and new channel structure by building a stylized model. We also focus our research on the leasing department’s decentralization; we give the optimal prices of leasing and selling as well as the wholesale price under centralized setting and decentralized setting. It is also very interesting to find that neither the centralization nor the decentralization can always dominates the other from the view of car manufacturers’total revenue. Specially, when the regulatory cost is greater than a threshold, decentralization dominates centralization, otherwise, centralization is better. Next, in order to improve our model and make it more practical, we change the distribution of consumers’ preference from uniform distribution to standard distribution. Numerically, we give the optimal solution of our decision variables and make the sensitivity analysis of mean value and variance. We believe our findings are very significant for the car manufacturing firms to make their decision better.