AUGUSTA, Ga. – Club Car, the world’s largest manufacturer of golf and utility vehicles for the golf market, announced a price increase for 2010 model year vehicles that reflects a renewed spike in global commodity costs.
The price for Club Car golf cars and utility vehicles will increase approximately 2.5 percent on orders beginning on Nov. 20, 2009. Company officials pointed to the rising cost of raw materials – especially lead, copper and aluminum – and a strengthening global economy as a primary reason for the increase.
“The raw materials we use the most are some of the same materials that are now in greatest demand around the world,” said Gary Michel, president and CEO of Club Car.
Since December 2008, according to the London Metal Exchange, the cost of copper has increased 50 percent, lead has jumped 35 percent and aluminum has increased 15 percent. The latest round of commodity increases follows historic price escalation in these materials in 2007.
Club Car annually purchases electric batteries that include approximately 20 million pounds of lead, and eight to 10 million pounds of aluminum are used to fabricate vehicle chassis. In addition copper wiring is used extensively in the vehicles’ electric motors and other components.
Michel said Club Car continues to work with its more than 300 suppliers to evaluate parts and subsystems that help the manufacturer “achieve the same or better performance with less expensive components or processes.” The company also employs hedging, just-in-time inventory and shared-warehousing strategies to control costs and mitigate price increases for the customer.
“Some of the best productivity and value analysis/value engineering gains are process related, looking at the entire supply chain to see how we can procure the part, move the part and assemble or install the part most economically,” Michel said.
Club Car also benefits from sourcing managers based around the world on behalf of parent company Ingersoll-Rand who make high-volume purchases to achieve economies of scale for the entire enterprise.
“Anytime there’s a part or a component or a subsystem or a redesign that allows us to provide a better product for the customer, we’re going to take advantage of it,” Michel said.