Auto logistics market rising in complexity as emerging markets grow

The markets in North America and Europe are forecast to grow by between 5 percent and 6 percent in coming years.    The markets in North America and Europe are forecast to grow by between 5 percent and 6 percent in coming years, but logistics companies are still looking toward opportunities in China and emerging markets, according to a new report by Transport Intelligence.
   However, the report, “Global Automotive Logistics 2014,” cites persistent problems in growth markets.
   “Automotive logistics offers growth prospects, but only for those logistics service providers who can exploit change,” the company said. “North America continues to expand, and the health of the German and UK car industries balance out the problems in France and Italy, but it is China and other emerging markets that will present the crucial test for logistics providers in the sector.”
   According to the report, China production and demand are growing, but a lack of openness makes it a very difficult logistics market to navigate. Meanwhile, vehicle manufacturers are developing new logistics systems to adapt to more globalized production.
   “Expansion in many emerging markets can be difficult, with knowledge of local conditions essential,” the report found. “Managing this issue will be key for major logistics service providers’ competitiveness in the future.
   “The underlying demand for automotive logistics services is healthy, with many parts of the world reaching a level of prosperity that is driving a rapid increase in car ownership. Indeed, the potential for growth appears to be enormous. The production base that needs to be put in place to meet this need is equally vast, but despite the best efforts of vehicle manufacturers, the effect of this expansion has been a growth in complexity. Big car companies are now faced with a trend toward networked supply chains, often crossing continents and making life much more expensive and complicated than the ‘local for local’ production model they have always striven to create.”
   Ti also noted that technology is driving the largest automotive suppliers to become complex systems integrators, which in turn is increasing the demands of their supply chains and assembly operations.
   “The result is that certain of the largest suppliers will require more and better logistics management,” the firm said. “The underlying structure of the automotive logistics market is evolving as demand grows. Logistics service providers will need to adapt to the new types of markets if they are to benefit from this growth.”