Logistics firms expand Chinese operations as auto sales grow

Article by Andrew Christian, on April 29, 2014

Carmakers are not the only ones expanding their operations across China, so are logistics firm that deliver cars and parts from sites to dealerships. Nippon Yusen, largest global carrier of vehicles by sea, is planning to add more logistics centers for trucks in China. Anji Automotive Logistics, meanwhile, will expand the construction for collecting and distributing vehicles.

In 2013, carmakers sold over 20 million vehicles, and the momentum is high likely to continue this year as auto companies expand inland. For instance, Ford is constructing its largest production complex in Chongqing, China – a city that is more populous than Chicago.

Chrysler, meanwhile, is expanding its Changsha site, located in the south-central province of Hunan. Volkswagen is likewise constructing a new site in the Xinjiang region while Nissan will start building Infiniti vehicles in Xiangyang.

Koji Endo, an auto analyst at Advanced Research Japan, remarked that there is not much increase in car sales in several large cities along coasts since many people already have cars.

He noted that for the next few years, sales growth should come from small coastal areas and rural areas in western China, wherein car ownership is still very low and income is relatively low. He expects the Chinese vehicle market to surge to 24 million units this year and over 30 million by 2020.

Such large sales means greater need for logistics firms doing the delivery. Takaya Soga, a general manager of Nippon Yusen's auto logistics group, told Bloomberg in an interview that they are expanding their network in China, noting that car sales are rapidly increasing in the inland.

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