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 hosted in China. Industry leaders from around the world, including Vioxx Global, TNT, Midea Logistics, Global Cargo, Audi, Ford, Volkswagen, and Delphi, attended the event. Alexis Nolan, editor of "Auto Logistics" magazine, noted that as automakers shift their focus from saturated European and American markets to China, their suppliers are following suit. This trend positions China as a growing hub for global automotive production and supply chains.
Analysts believe that the rapid expansion of China’s auto market, intense 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 two core businesses in China. As a leader in the field, Vioxx serves major automakers such as General Motors, Volvo, Delphi, and Daimler-Chrysler, offering comprehensive logistics solutions from upstream to downstream, including vehicle and parts distribution. With its clients deepening their presence in China, Vioxx’s China division has seen significant growth, with revenue increasing by over 400% in the past five years.
In 2003, China surpassed Germany to become the world’s third-largest auto market, with car sales doubling to 2 million units. By 2007, it was expected to reach 3.5 million. Industry forecasts predicted that by 2005, China’s auto production would hit between 6 to 7 million vehicles. Zhang Xuelu, Vice President of Marketing for Wan Luo Global, highlighted that while China’s per capita car ownership stood at just 5.2 per 1,000 people, this figure was expected to rise to 10.8 by 2008, compared to 286 across Asia and 540 in Germany.
BLG Logistics, which has long supported Mercedes-Benz and Volkswagen, reported increased demand for automotive parts and vehicle logistics in mainland China due to new production facilities in Beijing and Fuzhou. As competition intensifies, reducing production costs becomes crucial. Johnson added that falling car prices will create significant opportunities for logistics firms. In 2002, the cost of after-sales services for major auto parts manufacturers in China reached nearly 2 billion yuan. Compared to the 8% logistics cost ratio for European and American automakers, and as low as 5% for Japanese manufacturers, Chinese automakers typically face logistics costs above 15%. Reducing these costs opens up substantial business potential for the logistics industry.
Export opportunities are also becoming increasingly attractive. James K. Commoskey, Vice President of Global Automotive Solutions at Vioxx Global, said that the company is particularly interested in the future exports of China’s automotive industry. This is seen as a key opportunity, especially for multinational logistics firms with global networks. Dre Hold Aton, Chairman of BLG Logistics, noted that although China currently imports many automotive parts from Europe, domestic suppliers are strengthening and are expected to become major players in the global market.
Guo Konghui, an academician of the Chinese Academy of Engineering, once stated that China could become the next destination for the global automotive industry. In 2003, China’s total exports of automobiles and components reached $4.71 billion, up 34.4% year-on-year. Exports of cars (including parts) amounted to $400 million, while parts and components totaled $4.13 billion, reaching over 100 countries and regions. In January-February of this year, exports of auto parts and components reached $870 million, up 39.9% year-on-year. Industry projections suggest that by 2010, China’s auto parts exports could account for over 40% of its total sales.
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