Future Automotive Distribution and Supply: Obstacles, Economic Strain, and Regional Sourcing in 2025
The automotive industry is gearing up for a transformative decade, and a key event to help OEMs and tier-one suppliers navigate these changes is the upcoming Automotive Logistics' livestream, "Leading automotive logistics through 2025: Key turning points and trends". Scheduled for February 5, 2025, at 15.00 GMT/10.00 EST, this event aims to provide tools to proactively shape supply chain strategies for the future.
OEMs are currently grappling with a multitude of challenges. Maintaining low vehicle inventory to reduce working capital is a top priority, but this presents new logistics challenges. The industry is also facing a price war, particularly against cheaper Chinese imports, leading to margin compression and cost-cutting measures such as plant closures and job cuts.
The automotive supply chain is under threat from various factors in 2025, including global elections, geopolitical turmoil, cyberattacks, and climate change. To adapt, the industry is evolving to navigate dynamic trends such as industry restructuring, cost-cutting, trade disputes, and nearshoring.
One of the primary trends reshaping the automotive industry is the shift towards smaller supply chains and loss of market share for logistics providers, particularly in Europe. Traditionally an automotive export hub, Europe is now a net importer of vehicles. The cost differential between high- and low-labor-cost countries diminishes as EV and battery production becomes more automated, making nearshoring increasingly viable. The drive for battery localisation is reducing logistics costs for EV production.
Chinese OEMs are establishing production plants in Mexico and Europe to circumvent tariffs and secure access to key markets. China's rise as the world's largest vehicle exporter is reshaping global trade routes, with China capitalising on gaps left by Western companies, especially in Russia. OEMs like BYD are bypassing traditional logistics channels.
The key to success in automotive logistics is adapting to shifting supply chains, embracing technological advancements, and staying ahead of regulatory changes. Digitalisation, AI, and automation are emerging as key tools for improving efficiency and reducing costs in the logistics sector, but the return on investment for these technologies remains a challenge.
The livestream will feature expert insights from Gerardo de la Torre Garcia, regional senior director, Supply Chain Management USA & MEX at Nissan Group of North America, Matthias Schmidt, European autos analyst at Schmidt Automotive Research, Daniel Harrison, automotive analyst at Ultima Media, and others. For logistics providers, these cost pressures mean increased scrutiny of both inbound logistics and finished vehicle logistics (FVL).
Registration for the livestream is available now. Don't miss this opportunity to gain valuable insights and strategies to help your business thrive in the rapidly changing automotive landscape.
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