Kamp Motors

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Internal supplies by Kamp Motors[1]

Vécu and Kamp

The French company Vécu produces cars and lorries, buses and agricultural machinery. One of Vécu’s subsidiaries is Kamp Motors of Roosendonk, the Netherlands. It has more than 2,300 employees and is therefore a relatively small segment of Vécu. However, Kamp’s products are important, in that the company is an international leader in the field of engine production. This position is partly due to the fact that Kamp has been closely involved in developing racing car engines for many years.

Several of the components for Kamp’s engines are supplied by other businesses. In some cases, they supply standard components, in other cases, components produced according to Kamp’s specifications. Together with various essential components produced by Kamp itself, the components supplied by other businesses are used by Kamp in different types of engines.

Table 1 contains some financial information on Kamp relating to 2001.
Kamp produces four main types of car engines. Type 1 is a quite conventional type which is supplied mainly to businesses outside the Vécu concern. The more high-tech types 2, 3, and 4 are supplied only internally.

The reputation of Vécu’s car makes has always been based on their powerful and noiseless engines. Not all of the Vécu models are fitted with Kamp engines. A considerable number of engines is purchased externally. Whenever a new car model is being developed for one of the Vécu makes, the company has to decide whether to fit it with a Kamp engine or an engine purchased from an external supplier. Kamp’s engines, i.e. the types 2, 3, and 4, are often selected for the more exclusive Vécu models. The fact of the matter is that other manufacturers generally cannot supply attractively priced engines which meet Vécu’s specifications.

Kamp has managed to incorporate major new technology into its engines every few years, with the result that they are technically superior to other manufacturers’ engines. In fact, Kamp engines are so successful because of their efficient fuel consumption, power and noiselessness.

Table 1.Some financial data on Kamp Motors, 2001; x €1 million |Sales |361 | |External costs*) |204 | |Staff costs | 98 | |Depreciations | 20 | |Number of employees |2,303 |

*) External costs: costs of raw materials and auxiliary materials, purchased components, contracted work, etc.

Vécu is made up of a number of relatively independent divisions which have been subdivided into business units. Kamp is a business unit and profit centre within the Make A division (MA division). Make A is seen as the showpiece of Vécu; the MA division produces exclusive models only. In addition to this division, the Make B and Make C divisions (MB and MC divisions) are also supplied with quite a lot of engines by Kamp.

Make A cars are expensive, yet they have held a very strong position in the market for years on end. This is due to their design and their high-quality engines. Like Make A, Vécu’s other passenger cars (Make B and Make C) are not intended for customers who are interested mainly in a reliable, safe car that does not cost too much. MB and MC are to project the image of sporty, stylish and fun cars. Although the MB and MC divisions buy a lot of engines externally, the ‘glamour’ of Kamp engines enhances the image of their cars.

Incentives

At the end of 2000, the board of the Vécu concern decided to give the divisions and...
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