China's auto logistics market is witnessing a surge in business opportunities. From May 19th to 20th, the Automotive Logistics Asia Conference took place at the Shangri-La Hotel in Pudong, Shanghai — marking the first time a global automotive logistics conference was held in China. Industry leaders from around the world, including Vioxx Global, TNT, Midea Logistics, Global Cargo, Audi, Ford, Volkswagen, and Delphi, gathered to discuss the evolving landscape of automotive supply chains.
Alexis Nolan, editor of "Auto Logistics" magazine, noted that as automakers shift from saturated European and American markets to China, their suppliers will follow suit. This trend positions China as a key player in the global automotive production and supply chain. Analysts believe that the rapid growth of the Chinese auto market, increasing price competition, and promising export potential are drawing more logistics companies into the sector.
Johnson, vice president of Vioxx Global Freight, emphasized that auto logistics is one of the company’s core businesses in China. With major automotive manufacturers like General Motors, Volvo, Delphi, and Daimler-Chrysler as clients, Vioxx provides end-to-end logistics solutions, from parts distribution to vehicle transportation. As its customers expand in China, Vioxx’s China operations have seen significant growth, with revenue rising over 400% in the past five years.
In 2003, China surpassed Germany to become the third-largest car market globally, with car sales doubling to 2 million units. By 2007, this number is expected to reach 3.5 million. Industry forecasts predict that China’s auto production could hit between 6 and 7 million vehicles by 2005.
Zhang Xuelu, Vice President of Marketing for Wan Luo Global, highlighted that per 1,000 people in China, there are only 5.2 cars, compared to 286 in Asia on average and 540 in Germany in 2008. The German logistics firm BLG, which serves Mercedes-Benz and Volkswagen, has observed a growing demand for automotive parts and complete vehicle logistics in mainland China, driven by new production bases in Beijing and Fuzhou.
As competition intensifies, cost reduction becomes increasingly critical. Johnson pointed out that falling car prices will create new opportunities for logistics providers. In 2002, the cost of after-sales service for major auto parts factories in China reached nearly 2 billion yuan. Meanwhile, logistics costs in Europe and the U.S. account for about 8% of sales, while Japanese automakers manage to keep it below 5%. In contrast, Chinese automakers typically face logistics costs above 15%.
James K. Commoskey, vice president of global automotive solutions at Vioxx Global, expressed particular interest in the future exports of the Chinese auto industry. “This is the opportunity,†he said, emphasizing that multinational logistics firms are eager to tap into China’s growing export potential. BLG’s chairman, Dre Hold Aton, added that although China currently imports many automotive parts from Europe, its domestic suppliers are becoming stronger and are expected to play a major role in the global market.
Guo Konghui, an academician at the Chinese Academy of Engineering, stated that China may soon become the next hub for the global automotive industry. In 2003, China’s total auto and parts exports reached $4.71 billion, up 34.4% year-on-year. Auto parts exports alone amounted to $4.13 billion, reaching over 100 countries. In January-February of this year, auto parts exports rose by 39.9% year-on-year to $870 million. Industry experts expect that by 2010, auto parts exports will account for more than 40% of China’s total auto sales.
With such strong growth and increasing international engagement, China’s auto logistics sector is set to play a pivotal role in the global automotive supply chain.
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