Following the decline in trade volumes since the onset of the financial crisis, carmakers and logistics service providers expect global parts movements and logistics in the industry to accelerate at full force again. Audi has revealed that it anticipates dramatic increases in the use of containers and sequenced parts, while Gefco is showing signs of reasserting its global activities.
Speaking at the Automotive Logistics Europe conference this morning in Bonn, Audi’s head of transport logistics, Heiko Schultz, said that following a slip in 2009, worldwide trading volume is rising and will continue, as exemplified by Audi’s increasing production presence in China and India. But he also suggested that the fundamental nature of the supply chain is becoming more dependent on logistics.
Audi, for example, has increased it model range from 20 to 38 in the past five years, and this expansion will only continue, Shultz said. As a result, the number of suppliers Audi uses will have increased 33% between 2005 and 2015, while the number of containers as well as sequenced parts will have more than doubled.
“Containers have become the symbol of a globalised world, and this acceleration, after a drop last year, is returning, with export a driving issue again,” said Shultz.
However, while Shultz stressed these increased would mean logistics plays an increasingly important role in the automotive industry, he also revealed that the growth in container and part movements has actually coincided with a decrease in logistics costs relative to total costs. “We need this decline to keep on happening,” he said.
Giving a sense of the dramatic pressure on costs, Gefco’s business development and marketing manager, Phil Shankley, revealed that, even while Gefco had to work harder to meet expectations for flexibility, the company had seen a sharp increase in the number of tenders, as carmakers strive to make sure they are getting the best price in the market. “It has simply meant that people are looking at their cost basis constantly. For us, it has been an opportunity to consider the way that we operate to meet the challenges of our times,” he said, speaking during the same session as Shultz.
While Gefco had “taken a real hammering” in the past year by dramatic volume reductions, Shankley nevertheless revealed that the company was moving firmly forward in the return of worldwide trade. This year Gefco is opening new subsidiaries in Bulgaria and Kazakhstan, as the company looks to extend its presence in Eastern Europe toward Central Asia, a region that Shankley called “an essential area in connecting China and India to Russia and Europe.”
Shankley also pointed to ongoing general growth in China and India for the automotive sector, two markets that Gefco pulled back from during the crisis. With expectations that Renault will start producing in Chennai this year or next, and PSA also eyeing a production plant in the region, Shankley indicated that Gefco would eventually return to the market. “Our restrained participation in India will find new momentum,” he said.