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Shifting gear

The automotive sector has always relied on air freight for its just-in-time deliveries and lean inventory strategy. But what effect will near sourcing, emerging market demand and increasingly complex supply chains have? Phil Hastings finds grounds for optimism
 

Current trends in vehicle manufacturing are having a mixed – and constantly changing – impact on global automotive industry demand for air cargo services.

 

The net result, though, is ongoing new business opportunities for international airlines, air freight forwarders and air express operators active in a market that includes the movement of components for production lines, after-market spare parts and, on occasions, complete new cars.

 

That, at least, is the picture emerging from independent analysis of the automotive logistics sector and feedback from some of the players involved.

 

The complexity of developments in global vehicle manufacturing, and the resulting implications for air logistics providers, are highlighted in a recently published report by Transport Intelligence, a UK-based international research and analysis company.

 

The report, Global Automotive Logistics 2013, showed that a decline in the demand for vehicles in the developed world following the global financial crisis in 2007 was paralleled by ‘huge growth’ in emerging markets.

 

‘This accelerated existing trends in terms of a shift in either production locations or export destination. The result was a shift in focus for logistics market development towards emerging markets.’

 

However, the report continues, that picture has subsequently transformed again, with Germany continuing to export large volumes to China and many emerging markets, while the US market experienced a ‘robust’ recovery in demand.

 

‘This has resulted in substantial investment in new capacity in North America, which implies future demand for logistics services will continue to grow at respectable rates. Similarly, German vehicle manufacturers (VMs) are also investing heavily in their German-based assembly capacity,’ according to the report.

 

It goes on to claim that Chinese VMs, ‘despite being exposed to a market capable of growing in double-digit percentages, do not appear to be prospering…Rather, it is the global VMs that are reaping the benefits.’

 

Competition issues are also raising questions in Europe, suggests the report, with a string of VMs facing acute distress.

 

‘These VMs have become far more global in their supply chains with both finished vehicles and major components moving between continents in order to improve utilisation and reduce costs. Fundamental to this has been a move to increasingly globalised vehicle platforms by many VMs.’


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