One of China’s leading logistics providers, Anji Automotive Logistics, is currently restructuring its business to increase ocean and waterway services for short-sea shipping of automotive cargo, as well as well as to offer door-to-door services for vehicle exports from China.
Anji, a subsidiary of SAIC Motor, China’s largest carmaker, has been developing joint ventures with international providers in both Asia and North America, according to Yan Jun, assistant to the general manager, who spoke at the CFLP Import/Export Day at this year’s Automotive Logistics China conference in Beijing.
Anji Logistics had a turnover of RMB 14.7 billion ($2.35 billion) last year. While most of its revenue is in road-based vehicle logistics, around 20% of its business is now focused on maritime, a figure Yan said would grow to 30% by 2016.
The company is also looking to improve its port activities and inland links in expectations that Chinese exports will grow. “We are setting this up because we believe in the future there will be more export of vehicles from China and this will help us lay solid foundations for future business expansion; it is growing rapidly,” said Yan.
Anji has a number of joint ventures at ports in China, including at Shanghai, Dalien and Guangzhou, amongst others, and is negotiating another at Nanjing. Investment in these and other similar projects so far has reached RMB 5 billion.
At the same time, Yan tempered expectations concerning by how much exports would grow, following recent declines in Chinese vehicle exports. He admitted that targets of 2.5m vehicles (about three times higher than in 2013) would be difficult to achieve given that the majority of volumes are shipped to developing markets.
Along with its finished vehicle shipping, Anji is also looking at waterways for spare parts shipments, a sector that generated revenue for Anji Logistics of RMB 4.1 billion last year and has grown more than 30% over the last three years, according to Yan.
China should go global
Yan said that logistics providers should be concentrating on collaboration abroad, something the OEMs were currently exploring – including Dongfeng Motor and PSA Peugeot-Citröen – but the majority of China’s logistics companies were not. He said that most remain focused on the provision of services only from the port of import. By contrast, Yan said that Anji was actively pursuing joint ventures to secure last mile services in export markets, offering customers a door-to-door service.
“We are going international,” said Yan. “In Thailand the Japanese companies are taking up the lions’ share of the market, so if we work with these companies we can provide door-to-door delivery and services. We believe that collaborating with a local company is the best way to set up this business.”
Anji is working with NYK to provide services for SAIC in Thailand in a joint venture that was established before the end of last year.
“We hope to coordinate management between China and Thailand to provide rapid response and this can cover the entire supply chain of the automotive industry,” said Yan.
He added that the company was also in negotiations with Union Pacific in the US, a market that has so far seen no Chinese vehicle exports. “They have a very strong network in the US and we have extensive distribution networks in China,” said Yan. “So if we work with them we can accommodate finished vehicle movements to and from China and the US. This is our strategy for the future.”
