Global automotive logistics companies that are not showing enough commitment to carmakers in China during the current downturn will jeopardise their chances of future business when the market recovers, according to the China Federation of Logistics and Purchasing (CFLP).
Ma Zengrong, Vice General Secretary of the Chinese Automotive Logistics Association of the CFLP, said global LSPs need to stay in China or risk being seen as unreliable. “There is a question mark over their commitment. When the market is back to usual the carmakers will not be interested in them,” he said in Shanghai last week. The more recent absence from the market of certain leading LSPs “has been noticed,” he added.
His comments follow a series of withdrawals from the country as recession hits and international LSPs contract their operations. But as delegates at this year’s Automotive Logistics Conference in Shanghai will discuss in April, the emphasis should be on working to improve the low efficiency of logistics management in China, by using global expertise.
Earlier this month China announced government support for mergers and acquisitions in the logistics sector. The aim is to create large-scale companies as part of a wide-ranging financial stimulus targeting the more efficient development of multimodal transport, transhipment facilities, logistics parks and services to rural areas.
China’s National Development and Reform Commission (NDRC) has called for a 10% annual growth in the output of logistics companies by 2011, much of which will depend on improvements to visibility and planning in the supply chain. Also key will be consolidation among road transport companies, presently dominated by small, local providers.
“All these logistics challenges will not be overcome without the collaboration and search for solutions which a gathering of the all the principal players together can bring,” said Automotive Logistics China’s Conference Director Louis Yiakoumi.
Those principal players already confirmed as attending the conference in include: logistics chiefs Dr Feng Junxia of FAW, George Ho of Geely and Cliff Chen of BMW among the OEMs; Wang Lin of Wuhan Dong Hon Logistics (Dongfeng Honda) among key LSPs; and Karl Neumaier of Visteon and Jeffrey Richards of Delphi among tier one suppliers.
