NIPPON EXPRESS: DRIVING FORWARD AUTOMOTIVE LOGISTICS Vol.3

Nobember 18,2020

― Servicing China and India

Despite the headwinds facing the global car market today, analysts expect growth to return, with particular vigour in the two new drivers of growth: China and India. Since 2000, China’s vehicle production has surged nearly 10-fold to become the world’s largest in both production and sales. On such a rising tide, one of Nippon Express’s Chinese subsidiaries has gone from strength to strength and relaunched last year to focus purely on automotive logistics. “We have developed a nationwide network from Dalian in the north to Guangzhou in the south that provides procurement and maintenance parts logistics as well as round-the-clock parts inventory,” explains Yu Yong Hong, General Manager for the Nippon Express Automotive Logistics (China).

Within China, the company’s dense network of transport and warehousing provides unparalleled logistics of automotive parts to its over 400 clients, offering an optimal combination of local milk-runs, long-distance shipments, and frequent JIT deliveries under half an hour from warehouses to closely located factories. For shipments out of China, the company’s two Parts Consolidation Centers located in Shanghai and Guangzhou act as critical nodes for global automotive supply chains. From here, carmakers export every month some 1,300 FEU containers of parts made in China to factories in 20 countries around the planet. “Our sales in China have more than doubled over the past five years,” says Yu. “And we hope to achieve the same or better in the coming five by actively increasing our business with both Japanese and non-Japanese automakers.”

The other critical growth market is India, which overtook Germany in 2018 to become the world’s fourth largest car market. A key driver behind this growth is Maruti Suzuki – the Indian subsidiary of Japanese carmaker Suzuki Motor Company with more than half the share of the country’s passenger car market. Recently the company has ramped up production facilities in the state of Gujarat. Nippon Express, which has been providing milk-run and long-distance transport for the company and other automakers in the country, has followed suit by building a new warehousing facility outside the new factory. In the coming years, India is also anticipated to become a base to supply automotive parts and finished cars to Africa, the continent with some of the world’s fastest growing economies and populations. Nippon Express hopes to be able to provide automotive logistics for the expanding trade flows between India and Africa, explains Nagai.