EUROPE AUTOMOTIVE LOGISTICS MARKET
KEY FINDINGS
- European Automotive Logistics Market accounts for about 20% of the Global Automotive logistics Market in terms of value.
- Although Germany witnessed ~24% drop in auto production in 2020, it still accounted for 24% of the overall Europe automobile production
- EU demand for passenger cars increased by 24% between January-2021 to April-2021 compared to the same timeline in 2020.
- Finished goods segment alone accounted for ~3/4th of the overall market value in the type of goods segment.
- Although for within auto continent freight movement Road and Rail modes were popular, from the entire sector’s perspective Ocean mode was leading in terms of volumes of goods transported through this mode and thus accounted for larger market share.
- US based XPO Logistics were the market leader and the top 5 players accounted for ~55% of the market share
- Number of companies in the industry are embracing the use of augmented and virtual reality for tasks such as part picking and inventory management
- Almost XX% of the total population in Europe prefers online purchasing for any kind of automotive services and parts requirement.
INTRODUCTION
Global Logistics Market is roughly a $ 4.9 Trillion market. However, the automotive logistics sector is only 1-1.5% of the overall logistics market.
Europe Automotive Logistics is one of the top 2 markets in the automotive logistics segment.
In 2020, about 11.2M passenger cars were sold across Europe, making it the 3rd biggest auto market in the world after China & US.
Europe is the major exporters of passenger cars with production plants spread across Europe, especially in Western Europe
EU AUTO LOGISTICS MARKET SEGMENTATION
By Goods Type
- Finished Goods
- Inbound Parts
- Spare Parts
- Reverse Logistics
By Mode of Transport
- Road
- Rail
- Ocean
- Air
By Region
- Domestic
- International
EUROPE AUTOMOTIVE LOGISTICS MARKET DYNAMICS
Europe is the largest Auto exporter with Germany as the largest exporter in the world. Europe is the second largest automotive producer in the world with 17.8% of total automobile production.
Europe Union auto production fell by 23.3% in 2020, as it contracted in all key EU manufacturing countries.
As Europe is leading the shift towards EVs, the supply chain needs to be more and more secure due to the risk involved in the movement of battery related products.
- To keep the expansion of EVs infrastructure vehicle manufacturers, automotive suppliers are investing heavily in domestic supply chain and gigafactory networks for lithium-ion batteries
The United States is main destination of EU cars, with XX% in year 2020, followed by China with XX% and Turkey with XX%
Compared to previous years, the port activities in EU member states increased considerably. The leading ocean car carriers are also boosting their intra-Europe short-sea services
MARKET BY GOODS TYPE
Finished goods comprises of movement of finished automobiles from the assembly plant to dealers. This segment accounts for the majority of the revenue as evidently the cost of movement of the finished vehicle is higher and also the fact that a finished good travels to farther parts of the world increasing its ticket price.
Inbound Logistics’ path is mostly from the tier-1 & 2 suppliers to the production plants and in turn from these plants to assembly facilities. They account for 2nd largest chunk of revenue generated in the logistics part.
The spare parts logistics directly depends on car sales in the region. Thus, the share of this segment took a hit in 2020. Spare parts demand in the Europe is expected to pick up momentum in 2021 after a downturn in 2020. Various types of Filters remain the most in-demand spare parts that were transported in 2021.
Reverse logistics is a very small part of the sector. It is the movement of the vehicle from the customer to the dealer and to the company’s facilities. The revenue generated from this is almost negligible. The OEMs strive hard to avoid the return of goods to their facilities.
EUROPE AUTOMOTIVE LOGISTICS MARKET BY REGION
Although Germany witnessed ~24% drop in car production in 2020 it continued account for majority of the production and accounted for 24% of the overall Europe automobile production
Germany alone was responsible for 57 % of the EU total exports and imports. The top-5 countries approximately accounted for 83% of the EU export market. In 2020, UK exported about 750K units down by ~29% from 1.03M units.
The export of automobiles from Europe dropped by ~14% in 2020. In UK exports fell by 29% and in Germany by ~18%.
In 2020, Europe region exported about 5M car units. While US was the highest importer outside Europe region, UK was highest among the non-EU nations in terms of value
US has been the major importer of cars from Europe over the years and it is expected to follow the same trend.
EUROPE AUTOMOTIVE LOGISTICS MARKET BY TRANSPORT MODE
Rail & road transport continue to dominate auto freight transport within the continent as it is connected with one of the world’s best railway networks and also most of the countries are landlocked.
VW Group is planning to increase the number of vehicles moved by rail in Germany to 60%
Ocean transport is estimated to have the largest share of Europe’s auto freight transport as they can transfer large quantities of volume at once. Adding to this, is the top destination of European cars US , Africa and other regions where the ocean mode is more feasible than other modes.
Air freight transport of automobiles is preferred by suppliers and manufacturers for Just in Time (JIT) manufacturing processes
BREXIT IMPACT ON EUROPE AUTOMOTIVE LOGISTICS MARKET
The new Brexit deal that came into effect in late December in 2020 is likely to change UK’s automotive logistics relations with EU nations significantly.
Some of the instances of immediate impact of Brexit on the Europe Automotive Logistics Market were:
- UK goods no longer benefit from free movement of goods, leading to more red tape for businesses and adjustments in EU-UK automotive supply chains.
- Some UK automotive online purchases would attract import VAT from the EU and vice versa.
- HONDA closed its UK plant twice in Jan 2021 citing delays in receiving parts.
- In Feb 2020, Nissan pulled its X-Trail plans for Sunderland.
- Ford closed the Bridgend engine plant in 2020.
LATEST TRENDS IN EUROPE AUTOMOTIVE LOGISTICS MARKET
- In April 2021, DHL launched its DHL EV TV initiative. It focusses on programs dealing with expertise in battery logistics and its Formula E engagement.
- DHL in April 2021, announced its partnership with Fiat by purchasing the first 100 units of Fiat’s new E-Ducato. These vehicles will be used for last mile logistics.
- In March 2021, Kuehne+Nagel completed the acquisition of Apex International Corporation. The transaction amount was estimated to be € 1 Billion.
- In February 2021, CEVA Logistics successfully completed a full RORO charter for almost 4,000 cars between South Korea and Libya, working in close cooperation with its parent company, the CMA CGM Group.
- Late in 2020, DSV Panalpina took over Prime Cargo’s activities in Denmark, Poland and China from Mitsui-Soko Group
- In Dec 2020, DHL Freight entered into a strategic partnership with UK logistics provider Baxter Freight for freight transport in the UK and between the UK and continental Europe.
- CEVA Logistics won an extension to its contract in June 2020, with Volkswagen for the operation of the company’s auto spares center at Vinhedo in Brazil.
- In June 2018, Kuehne + Nagel and the BMW Group expanded their partnership with 2 new distribution centres in Germany, and Poland and dealer distribution from the two main BMW R & D centres in China
EUROPE AUTOMOTIVE LOGISTICS MARKET SIZE AND FORECAST
The Europe Automotive Logistics market is growing at XX% CAGR from 2020 to 2026 in terms of value.
The automobile market in Europe sales dropped by 24%in 2020 and is expected to get back to its pre-COVID levels only by 2024.
Logistics providers are investing in digital supportive tools like RTTV, adapt sustainable processes in order to make supply chain more secure
COMPETITIVE LANDSCAPE
XPO Logistics is the market leader in the European Automotive Logistics Market.
Top Europe based players like DHL, DSV, K+N and Ceva Logistics accounted for ~43% of the overall market in 2020.
US based companies like CH Robinson & Expeditors cumulatively accounted for XX%
XPO and K+N had the highest gross profit margin in 2020. Nippon express has witnessed low Domestic freight volume in 2020 resulting in low net income.
The operating profit margin of most of the top firms range from 3% to 7%.
COMPANY PROFILES
- UECC (United European Car Carriers)
- Eukor
- Wallenius Wilhelmsen Logistics
- NYK Line
- DHL
- DB Schenker
- Kuehne+Nagel
- XPO Logistics
- DSV
- Nippon Express
- CEVA Logistics
- SNCF Logistics
