While global markets were topsy-turvy by the end of 2013, vehicle sales in several of the most important regions were in good if not rude health. The two biggest, China and the US, have grown at their fastest pace in years. Others, like India, remain in a funk, but should recover. Southeast Asian sales, following trouble earlier this year, are now expected to grow 8% annually for the next five years.
Japan and Europe have been the ‘sick men’ of the auto industry for half a dozen years, suffering currency shocks, debt crises, bailouts, diplomatic rows and natural disasters. Even these invalids may be on the slow mend. European sales showed timid growth at year end, with some experts saying a recovery has begun, which would be a much-needed tonic to outbound providers. Our European road carrier survey suggests that since most have adjusted capacity to a smaller market, they should benefit even from incremental rises – although it is unlikely to be enough to make up for years of pain.
The Japanese sector is feeling better. Short-term stimulus may help the domestic market, while government efforts to increase inflation have devalued the yen, which had become an export crippler. However, this reversal has not stopped carmakers like Mitsubishi from stepping up globalisation efforts. The carmaker is now exporting nearly as many cars from Thailand as from Japan, with healthy increases planned for production in Southeast Asia. During an interview at the OEM’s Tokyo headquarters, Mitsubishi’s export team reveals how it is re-engineering its port network in response. [sam_ad id=6 codes='true']
Risks for global infection remain, from a potential housing bubble in China to changes in American monetary policy; recovering but weak patients like Europe and Japan are the most susceptible to relapse. There may be no cure for such uncertainty; logistics providers must simply respond by quickly cutting or adding capacity – in either case, unpleasant pills to swallow.
The best preventative medicine, however, could be available over the counter: working together more. Sharing more short- and long-term forecasts between OEMs and providers can only help. Opening empty backhauls to competing carmakers, meanwhile, would improve margins and lead times.
Such sharing is a poorly practised treatment. Even if logistics managers are comfortable with handing over their empty wagons or trucks on return legs, upper management may see it as a helping hand to the competition. Nevertheless, it is a healthy exercise that would help keep the sector fit.