Logistics response to China overtaking US car production becomes vital

CHINA is expected to continue to be the primary driver of global vehicle production over the coming four years with the US hanging onto the No 2 spot, according to the Global Light Vehicle and Powertrain Forecast service.

During the forecast period, India is expected to leap in front of South Korea and Germany to rank fourth among vehicle producing countries.

"Providing the logistics systems to support this structure will be the main challenge and opportunity for automotive logistics service providers from now on." said Thomas Cullen, senior analyst at UK's Transport Intelligence.

"The automotive world looks like it is evolving into one dominated by a few large global vehicle manufacturers with operations in markets such as China, Brazil, Russia, India and elsewhere integrated into supply chains heavily rooted in North America, western Europe and Japan," he said.

The monthly-updated forecast that is based on automotive data and analysis by WardsAuto and AutomotiveCompass, foresees that the volume of vehicle production will grow globally until 2018, with total vehicle output predicted to rise by 23 per cent over the next six years.

The report highlights the increasing dominance of Asia Pacific led by China until 2016, when production in China will climb to 26 million units, an additional 7.5 million vehicles compared to the number manufactured in 2012.

By comparison, production in the US is forecast to grow by 1.3 million vehicles by 2016, while production in the third-highest producing country, Japan, is anticipated to drop by 875,000 vehicles over the next four years, as capacity continues to shift to other locations, a joint company statement posted on PRNewswire said.

The new forecast also urges auto manufacturers to consolidate the number of platforms underpinning their vehicles while increasing the percentage of cars and trucks that rely on smaller engines.

It also projects that Volkswagen will be the top-produced platform in the world by 2015, as its MQB architecture, which will spawn several small and midsize car and cross/utility vehicles, is predicted to end a three-year reign by Toyota's MC platform that began last year and is expected to continue through 2014.

The forecast also confirms the gradual trend of production consolidation among global platforms. In 2012, 31 platforms accounted for half of global production. In 2016, that number is expected to fall to 27.

The forecast also shows a shift to smaller engines continuing as production of vehicles with engines of four-cylinders or less rises from 82 per cent of the total in 2012 to 85 per cent in 2018.