Rising car output spurs spike in logistics support
As automobile sales spread from China's crowded east coast cities to the more rural west, companies that move cars and spare parts by truck from factories to showrooms are expanding to meet the demand.
Nippon Yusen K.K., the world's largest carrier of vehicles by sea, plans to add more logistics centers for trucks in China as part of a multibillion yen worldwide expansion. Anji Automotive Logistics Co., a unit of China's biggest carmaker, will "expand the construction for collecting and distributing" autos, according to its Web site.
China, where annual auto sales surpassed 20 million units in 2013, forecasts higher sales this year as ownership gains spread to inland areas from coastal cities.
Ford Motor Co. is building its largest production complex in the inland metropolis of Chongqing, while Chrysler Group is expanding a factory in Changsha, a city in the south-central province of Hunan.
"Many big cities along coasts are not seeing a big increase in cars as many people already have cars," said Koji Endo, an auto analyst in Tokyo with Advanced Research Japan. "For the next few years, growth should come from small coastal areas and rural areas in the west where car ownership is still very low and income is relatively low. Transportation is needed not just for cars but also auto parts."
30 million
China's car market probably will grow to 24 million autos this year and exceed 30 million by 2020, compared with 22 million last year, Endo said. In comparison the United States, the second-largest car market, sold 15.6 million cars last year.
Volkswagen AG also is building a plant in the far western Xinjiang region and Nissan Motor Corp. this year will produce Infiniti luxury cars in the central city of Xiangyang.
"We're expanding our network in China," Takaya Soga, a general manager of Nippon Yusen's auto logistics group, said in an April 8 interview in Tokyo. "Car sales are rapidly increasing in inland China."
Anji Automotive, in Shanghai, is a subsidiary of SAIC Motor Corp., China's largest domestic automaker. Anji is the country's largest car logistics company, transporting more than 2 million vehicles annually, according to its Web site.
The company transports cars for SAIC's ventures with General Motors and Volkswagen, the country's two largest non-Chinese automakers last year, according to Anji's Web site.
Rising production
Nippon Yusen, in Tokyo, transported 1.4 million cars in China in 2013, including some in a venture with Anji, according to figures from the company. Nippon Yusen probably will boost trucking of vehicles to 5.7 million worldwide in 2016, up from 3.7 million last year, and China's share is around 40 percent, Soga said.
"More and more distribution centers are needed," Soga said. "Domestic production is shooting up."
"Nippon Yusen is doing the right thing by aiming to expand in inland China," said Masaharu Hirokane, an analyst at Nomura Holdings Inc., said in Tokyo last week. "However, unless they try really hard it's going to be difficult to meet its goals. The pace of expansion in China's market is declining."
Nippon Yusen may get a boost in plans to expand its trucking business in China from its current customers. Toyota Motor Corp., Nippon Yusen's biggest customer, predicts record China sales of 1.1 million units this year and plans further expansion. The Japanese carmaker accounts for 3.5 percent of Nippon Yusen's sales, while Honda makes up 1.3 percent, according to data collected by Bloomberg.
Nippon Yusen also is expanding into trucking in North America, where Japanese carmakers have factories, for the first time to grab a share of the market there, Soga said.
The company is buying a 30 percent stake in Mexican trucker Consorcio de Servicios Internacionales SA de C.V. for several billion yen, Soga said.
"There is the potential for them to see value added from their current customers," Nicholas Cunningham, an analyst at Macquarie Group, said in Tokyo this week. "It could be a potential positive."
China, where annual auto sales surpassed 20 million units in 2013, forecasts higher sales this year as ownership gains spread to inland areas from coastal cities.
Ford Motor Co. is building its largest production complex in the inland metropolis of Chongqing, while Chrysler Group is expanding a factory in Changsha, a city in the south-central province of Hunan.
"Many big cities along coasts are not seeing a big increase in cars as many people already have cars," said Koji Endo, an auto analyst in Tokyo with Advanced Research Japan. "For the next few years, growth should come from small coastal areas and rural areas in the west where car ownership is still very low and income is relatively low. Transportation is needed not just for cars but also auto parts."
30 million
China's car market probably will grow to 24 million autos this year and exceed 30 million by 2020, compared with 22 million last year, Endo said. In comparison the United States, the second-largest car market, sold 15.6 million cars last year.
Volkswagen AG also is building a plant in the far western Xinjiang region and Nissan Motor Corp. this year will produce Infiniti luxury cars in the central city of Xiangyang.
"We're expanding our network in China," Takaya Soga, a general manager of Nippon Yusen's auto logistics group, said in an April 8 interview in Tokyo. "Car sales are rapidly increasing in inland China."
Anji Automotive, in Shanghai, is a subsidiary of SAIC Motor Corp., China's largest domestic automaker. Anji is the country's largest car logistics company, transporting more than 2 million vehicles annually, according to its Web site.
The company transports cars for SAIC's ventures with General Motors and Volkswagen, the country's two largest non-Chinese automakers last year, according to Anji's Web site.
Rising production
Nippon Yusen, in Tokyo, transported 1.4 million cars in China in 2013, including some in a venture with Anji, according to figures from the company. Nippon Yusen probably will boost trucking of vehicles to 5.7 million worldwide in 2016, up from 3.7 million last year, and China's share is around 40 percent, Soga said.
"More and more distribution centers are needed," Soga said. "Domestic production is shooting up."
"Nippon Yusen is doing the right thing by aiming to expand in inland China," said Masaharu Hirokane, an analyst at Nomura Holdings Inc., said in Tokyo last week. "However, unless they try really hard it's going to be difficult to meet its goals. The pace of expansion in China's market is declining."
Nippon Yusen may get a boost in plans to expand its trucking business in China from its current customers. Toyota Motor Corp., Nippon Yusen's biggest customer, predicts record China sales of 1.1 million units this year and plans further expansion. The Japanese carmaker accounts for 3.5 percent of Nippon Yusen's sales, while Honda makes up 1.3 percent, according to data collected by Bloomberg.
Nippon Yusen also is expanding into trucking in North America, where Japanese carmakers have factories, for the first time to grab a share of the market there, Soga said.
The company is buying a 30 percent stake in Mexican trucker Consorcio de Servicios Internacionales SA de C.V. for several billion yen, Soga said.
"There is the potential for them to see value added from their current customers," Nicholas Cunningham, an analyst at Macquarie Group, said in Tokyo this week. "It could be a potential positive."
