Summary

Key Highlights
The global automotive logistics market is expected to register a growth rate of more than 6% during the forecast period. With the automotive industry continually evolving, logistics are getting complex. Automotive companies are looking toward supply chain strategies, in order to exploit new market opportunities, reduce costs, and maintain competitive advantage.


Key Highlights
Additionally, introduction of electric vehicles is also projected to offer a key uplift to the automotive logistics market, globally. The players operating in the logistics industry also offer warehousing and inventory management services to OEMs as well as Tier I and Tier II component manufacturers. The demand for these services depends on vehicle production.


Key Highlights
Hence, the regions with more vehicle production is likely to have a significant share in the automotive warehousing sector. In addition to warehousing and distribution, logistics service providers (LSPs) also offer assembly services for OEMs.


Key Highlights
Global car makers are disrupting the traditional supply chain with innovative transport solutions. For instance, in Jan 2019, Renault announced plans to start a home delivery service in Russia for vehicles sold via its online showroom. Promoting the online showroom is part of Renault’s sales development strategy in Russia. It has already sold 27,000 finished vehicles via the site, primarily Renault Kaptur and Renault Duster units.


Key Highlights
While roll-on/roll-off (ro-ro) is the traditional method of shipping finished vehicles, containerization is becoming increasingly viable, as the automotive industry decentralizes and introduces more EVs. Growth in China and Southeast Asia offers good opportunities for the shipping and logistics companies.


Key Highlights
Furthermore, the use of containers on developing routes out of China is also being adopted, especially by rail between China and Europe.
Southeast Asia is considered as one of the favorable region to make containerization feasible, as the region witnesses growth in vehicle sales and there is demand for logistics services.


Key Highlights
Following the free trade agreement signed in the ASEAN markets, including the Philippines, Malaysia, Thailand, Vietnam and Cambodia, trade in finished vehicles has grown. CFR Rinkens, a vehicle transportation service provider, won a contract to ship BMWs from Europe to Vietnam in containers.


Key Market Trends

Positive Outlook for the Automotive Sales and Production Demands Efficient Logistics Services

Despite some headwinds, the automotive industry looks bright, globally. The United States light vehicle sales peaked in 2016 with 17.46 million-unit sales, and 2018 marked the fourth consecutive year with over 17 million-unit sales. According to industry sources, global light vehicle production unit sales have been remarkable and continue to grow. APAC is expected to register the highest growth rates in terms of production volumes followed by North America. Furthermore, electric vehicles production and sales are increasing at a record pace, which need specialized logistics.

Asia-Pacific Dominates the Market


As per the industry analysis, the Asia-pacific region is estimated to hold the major market share in the market studied. This is primarily because of the presence of the emerging economies, like China and India. Numerous factors, like easy availability of raw materials, increased demand for vehicles in the region, rising population, and availability of low wage workers, are anticipated to drive the automotive logistics market in the region.



APAC is home to some of the major automotive OEM companies, like Toyota, Maruti Suzuki, Hyundai, and SAIC Motor Corporation Limited, among others. With the increasing production and trading activities, there is a demand for the logistics companies to manage the procurement, transport, and storage activities of the OEMs to optimize the latter’s supply chain more efficiently.



The global logistics companies are increasingly entering the APAC region, to tap the growth associated with the market. For instance, in June 2019, French logistics provider, GEFCO, has set up a dedicated subsidiary in Chongqing (China) for specializing in importing and exporting vehicles by rail between Europe, Russia, and China. Additionally, it is developing the group’s other logistics activities in Central China.



Beyond current inbound and aftermarket services in the Chinese automotive sector, GEFCO plans to boost OEM supply chains in China with activity in the finished vehicle sector. These include door-to-door services for complete built-up units, pre-carriage, car transport, storage, compound design, operation management, and domestic distribution to dealers. Furthermore, the group also anticipates increasing demand for new-generation automotive logistics and other development opportunities resulting from China’s Belt and Road infrastructure-led initiative.



OBOR extends to most of the countries in the region with major development plans. Electric Vehicle sales are going to witness a significant growth in the region, owing to several nations environmental and sustainability goals. Logistics companies who have capabilities to handle EV’s and its parts can be benefited from this scenario.



Interestingly, GEFCO has a five-year contract with Chinese producer CATL, which began in Feb 2019. The company transports batteries from China to Europe for leading OEMs and suppliers, and it provides electric-specific compound services in different markets. Additionally, GEFCO and its JV partners have worked with Chinese EV brands, such as BYD.


Competitive Landscape


The automotive logistics market is fragmented in nature with the presence of large global players, and small- and medium-sized local players, along with few players who occupy the market share. Most of the global logistics players have an automotive logistics division to meet the market needs and demand. Additionally, local players are increasingly enhancing their capabilities in terms of inventory handling, service offerings, products handled, and technology.



The third-party logistics (3PL) service providers in the market compete intensely based on reliability and supply chain capacity. By offering value-added services, companies would differentiate their service offerings. The growing e-commerce sales are creating opportunities, as well as challenges to the logistics firms in terms of speed, delivery, etc.



Global companies, who have high assets and capital, can invest in advanced technology and distribution centers and can benefit from the above-mentioned scenario. On the other hand, regional and local players are coming up with better sector solutions to support the needs of the manufacturers, retailers, as well as dealers.


Additional Benefits:

The market estimate (ME) sheet in Excel format
3 months of analyst support

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