Market Trends of Global Automotive 3PL Industry
Increasing partnerships between automotive manufacturers and logistics companies
The automotive industry has been one of the prime contractors of logistics companies over the years, and the latter has benefitted massively from the automotive industry. The automotive industry continuously partners with logistics players to transport their components and finished vehicles from one location to another. With the increasing partnerships, automobile and component manufacturers are facilitated with better control in managing inbound and outbound transportation services, shorter lead times, and timely deliveries. The automobile industry relies heavily on outsourcing logistics services that aid in acquiring new information and expanding process flexibility.
The automotive industry will likely pick up the pace soon after governments steadily lift the various containment measures to revive the economy. Automobile production gained pace in 2022. Over the last several years, 3PL industries have steadily given specialized services and IT solutions to the manufacturer's regions outside the business's primary focus. Outsourcing automobile logistics for parts sequencing or consolidation networks has shown to be a worthwhile investment.
Growth in Asia-Pacific automotive industry
The Asia-Pacific region, which spans a surface area of 29.3 million square kilometers, is home to 60% of the world's population. Numerous nations in the region, notably China and India, are in the top ten in terms of population growth. Asia's economies and sectors are continually changing, which is not surprising given the region's growing population.
The automotive industry is one such sector. A growing population raises the need for efficient mobility. Some of the most valuable automakers in the world are said to be based in the area. With its high levels of production, the automotive industry-which encompasses the production of motor vehicles as well as aftermarket parts-generates significant sales of both passenger cars and commercial vehicles for the area. Because of this, it serves as the foundation of many Asia-Pacific economies.
The outbreak of the Coronavirus disease (COVID-19) acted as a massive restraint on the automotive parts and components market in 2020 as supply chains were disrupted due to trade restrictions and consumption declined due to lockdowns imposed by governments globally. However, Government incentives, growing regional demand, and easy availability of raw materials are expected to drive the market growth.
The development of the auto parts manufacturing industry in Asia- Pacific is primarily driven by the growing automobile manufacturing industry, especially in countries, such as China, Korea, and India. with the rising electric vehicle production, the requirement for a large and diversified number of automotive parts and components is increasing and this would be one of the major factors propelling the market growth in the region. Increasing scrapping rates of motor vehicles and engines tend to propel the demand for original equipment engines.
Scrap rates are higher in developed countries, owing to more stringent environmental regulations and thus, replacement of motor vehicles and their engines is more frequent compared to the developing world.
