Car price cuts force companies to cut costs Car logistics industry smell business opportunities

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Like the increasingly strong joint venture desires of automakers, the joint venture trend in the field of automotive logistics is becoming increasingly apparent. On February 20, China Railway Ito Logistics Co., Ltd., jointly established by China Railway Modern Logistics Technology Co., Ltd. and Japan's ITOCHU Corporation, was formally listed. China and Japan invested 10.5 million yuan, and the proportion of equity was 67% and 33%. At this point, another large-scale domestic logistics company combined with foreign capital to enter the increasingly prosperous automotive logistics market.

Joint venture wave


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China Railway Modern Logistics is a large-scale third-party logistics company controlled by the China Railway Materials Corporation and has a deep railway background. China Railway not only has branch offices in more than 10 major cities in China, but also has established logistics operations departments in many small and medium-sized cities. The developed logistics operation network has become the main reason for foreign investors. Previously, there have been signs that domestic logistics companies, which are currently quite competitive, have become joint venture targets for foreign investors to enter China.

According to news from the Daejeon Group, in March, Daejeon Group’s joint venture with France’s Jeffery Logistics Logistics Corp. is expected to be formally launched. As early as last December, the two parties had already signed preliminary letter of intent for joint ventures.

Gefco is a wholly-owned subsidiary of PSA Peugeot Citroen and the largest automotive logistics service provider in Europe, providing automotive manufacturers with full logistics services. Volkswagen, Toyota, BMW, etc. are all its customers.

Previously, China Shipping's leading companies China Shipping Group and COSCO Group also jointly invested with Japan's Kawasaki Steamboat Co., Ltd. and Japan Post Shipping Co., Ltd. to expand the automotive and shipping market.

Profit margins

“Most domestic logistics companies are emerging companies. Although services are gradually improving, they still lack experience in the operation of automotive logistics. We hope to enhance our services through joint ventures.” Li Jianping, Manager of Human Resources Department of China Railway Modern Logistics Technology Co., Ltd., clearly stated With his own joint venture intentions.

In the past two years, the competition in the auto industry has intensified, and the price reduction has become the trend of the times. From the perspective of automakers, the requirement to reduce production costs becomes more and more urgent. According to statistics, the ratio of logistics costs to sales in European and American auto manufacturers is about 8%, and Japanese auto makers can even reach 5%, while the number of Chinese auto manufacturers is generally above 15%. It can be seen that Chinese automobile manufacturers have a lot of room to reduce costs from the logistics link. The industry had predicted that by 2005 China's auto production will reach 6 million to 7 million vehicles. The demand for warehousing and distribution of the entire vehicle is considerable.

According to the automobile manufacturing enterprise logistics classification: including vehicle logistics and spare parts logistics. The supply chain management of tens of thousands of spare parts for each car is seen as a higher end area than the entire vehicle logistics service. Its huge market space is even more paralyzed by logistics companies.

According to statistics, in 2002, according to the scale of auto parts sales, the logistics cost of spare parts after-sales service for the major large-scale automobile manufacturers in China could reach nearly 200 million yuan.

Desire blocked

Liu Jingfu, general manager of China Railway Modern Logistics Technology Co., Ltd., made it clear: “The joint venture hopes to introduce foreign advanced management experience and technology, further strengthen the links between domestic companies and internationally renowned multinational companies, and enhance the brand and visibility of China Railway Modern Logistics so that they can quickly Into the international logistics market.” This phrase seems to reflect the general voice of domestic logistics companies: rely on their own network advantages in the country, in exchange for foreign advanced management experience, so as to achieve a win-win situation.

The first domestic automotive logistics joint venture is the Anji Tiandi Automobile Logistics Company established in 2002 by SAIC Industrial Sales Corporation and Dutch TNT Corporation. Since the beginning of the joint venture, Anji Automotive Logistics has positioned itself as “the core business of vehicle logistics and actively develops its spare parts logistics business.”

Long Shaoliang, deputy director of the Management Technology Committee of Anji Tiandi Auto Logistics Co., Ltd., admits that it appears that the joint venture has not achieved their expected goal. Two years after the joint venture, the foreign party did not enter advanced management and technology into the joint venture company.

Although Anji has developed over the past two years, the initial investment has been withdrawn. However, to enjoy the lucrative profits of the vehicle logistics field, TNT does not seem to be eager to open up the spare parts logistics field.

Long Shaoliang believes that the strategic significance of the joint venture company lies in landing a broad market in Asia, obtaining potential customers, and cultivating powerful business opportunities in the immature logistics market. If it is impossible to increase the management and technology of the joint venture company and cannot obtain overseas market share, what is the significance of the joint venture?

Liu Jingfu, general manager of China Railway Modern Logistics Technology Co., Ltd., has no further comment. He only stated indifferently that this issue needs to be gradually resolved during the negotiation and later operation of both parties.

deeper reason

Apart from the differences in understanding between the Chinese and foreign parties that may affect the development of domestic logistics companies in the components and parts sector, Long Shaoliang believes that some of the underlying causes of the difficulty in the development of automobile logistics are still to be solved.

Although the logistics of spare parts is like an undeveloped “gold mine”, due to the high technical content of parts and components logistics, the number of logistics companies that can engage in spare parts logistics services is currently in the field of automobile logistics in China.

Judging from the current service functions provided by China's automobile logistics, traditional services such as transportation and warehousing also account for a considerable proportion, and 85% of the revenue from logistics services comes from these basic services. In the area of ​​parts distribution, automotive logistics can be said to be difficult to "flow."

Analysis of the underlying causes of Long Shaoliang: First, institutional and regional barriers: China's various brands of auto groups compete fiercely with each other, and regional openness and competition caused by regional protection and policy protection are insufficient.

In addition, the effective price system in the domestic logistics sector has not yet formed. All major logistics companies are fighting each other and the information is kept confidential and they have not been able to cooperate effectively. Some owners of socially idle resources will see the price of one-way fares even lower to obtain business. This will also have a great impact on the formal price system, resulting in a certain degree of vicious competition within the industry. .

“The management of logistics companies, service specifications, and transportation tools currently have no uniform standards. When there are problems in the entire supply chain, companies will often be at a loss,” Long Shaoliang said.