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Automotive Logistics in China

Automotive Logistics in China. Wang Shuqin Institute of Systems Engineering Southeast University Nanjing, P. R. China. Outline. Economic and logistics development Automotive logistics Logistics of Volkswagen Industry prospects. 2.

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Automotive Logistics in China

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  1. Automotive Logistics in China Wang Shuqin Institute of Systems Engineering Southeast University Nanjing, P. R. China

  2. Outline • Economic and logistics development • Automotive logistics • Logistics of Volkswagen • Industry prospects 2

  3. Economic Reform • The Chinese economic reform refers to the program of economic reformscalled "Socialism with Chinese characteristics" . • 1970s -1980s, opening trade with the outside world, instituting the household responsibility system in agriculture. • 1980s -1990s, focused on creating a pricing system and decreasing the role of the state in resource allocations. • 1990s focused on closing unprofitable enterprises and dealing with insolvencyin the bankingsystem. • After the start of the 21st century, increased focus has been placed on narrowing the gap between rich and poor in China.

  4. WTO Entry • The World Trade Organization (WTO) • On December 11, 2001 China formally became the 143rd member of the WTO. • What really behind these changes is the transformation from planned economy to market economy. Signing ceremony

  5. GDP and foreign trade both have dramatic growth

  6. 2008 Data

  7. What is Automotive Logistics ? Transportation Suppliers of raw materials Warehousing Spare parts providers Vehicle manufacturers Packaging Integrated management Bridge Wholesalers Handling Logistics companies Modification Information End users

  8. The Characteristics of Automotive Logistics

  9. Automotive Logistics • With sustained economic development and increasing living standard, automobile consumption grows rapidly. • In the next 10 years, auto demand will remain 10% to 15% increase. • China has becoming the supply base of world's automobile production, so its auto logistics market cannot be ignored.

  10. 1999-2008 Automobile production scale and growth rate Source: China Association of Automobile Manufactures, CAAM

  11. 2000-2008 Automobile sales volume and growth rate Source: China Association of Automobile Manufactures, CAAM

  12. The Important Role Port Plays in Automotive Logistics • Port is important hub in automotive logistics chain. Guangzhou automobile port Dalian automobile port Shanghai port

  13. Parts suppliers Country A Overseas assembling Multi-country cross-docking warehouse Parts suppliers Country B Parts suppliers Country C Parts Suppliers CKD/SKD Vehicle assembly plants Local parts suppliers JIT/VMI Warehouse Port Dealers Parts supplier #1 Cross-docking Warehouse Parts supplier #2 Parts logistics Postpartum logistics Business Process of Port Automotive Logistics Port

  14. Shipping Capacity

  15. Top Ten Car Shipping Transportation Companies

  16. Worldwide Automotive Logistics Transit Ports: • New York Port and New Jersey Port, USA • Bremerhaven, Germany • Zeebrugge port, Belgium • Tahara car terminal, Japan • Halifax Harbour, Canada

  17. The Main Problems • The supply chain of automotive logistics is very long. • Automobile logistics business model should be improved. • Entry barrier is low, and out frequently. • Slow progress in the standardization of automotive logistics. • Automotive Logistics revenue mainly from basic services. • The application of advanced information technology is not popular. In the international market, 80% of the automotive enterprises outsourcing; In china, the vast majority of logistics providers are the subsidiary companies of manufacturer. National Standards, GB1589-2004 Length, 16.5m, Width, 2.5m, Height 4.2m But in fact Length, 22m, Width, 2.7m, Height 4.4m

  18. German Cars • There many world famous auto brands. • German cars take up a great market share in China. Audi Volkswagen Volkswagen Mercedes-Benz BMW Porsche

  19. Volkswagen • In Germany, 29% of logistics companies involved in automotive logistics. • Four-layer supply chain of Volkswagen:(Schenker) Retailers Spare parts importers Parts distribution center in Singapore Kassel

  20. Shanghai Volkswagen • In China, Volkswagen has two joint venture. • Founded in 1985, Shanghai Volkswagen, a Sino-German joint venture, the investment ratio of 50% each. It is one of the largest production bases in China. • For automobile enterprises, automotive logistics includes production planning, purchase order devolution and tracking, BOM maintenance, etc. Touran PASSAT LAVIDA POLO TIGUAN SANTANA

  21. Development needs Improve customer satisfaction Focus on core business outsourcing Risk sharing Data Base Logistics strategy Saving investment Reduce costs Increase efficiency

  22. After outsourcing: • Warehouse logistics • Transport logistics • MIS(TMS and WMS)

  23. Industry Prospects • There is still a great room for development of automotive logistics in China. • International automotive logistics all want to share the Chinese market. • 3PL will be the dominant mode of automotive logistics. • More value-added services, and the optimization of automotive logistics supply chain is important.

  24. Thank you!

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