They include: · The failure of some component suppliers in Europe, for example, and the related need to establish new suppliers, increasingly many thousands of miles away; and


· Reductions in inventory and goods in-transit, the move towards ‘leaner’ supply chains, which make any failure in those chains more critical. Expanding on the first point, Brennan said that in some


cases, European vehicle manufacturers have responded to difficulties in securing sufficient component volumes from regionally-based suppliers by stepping up their sourcing in Asian countries such as China and India. That development, he observed, is in turn opening up new opportunities for air freight/air express service providers.


GLOBAL SOURCING Thomas Cullen, chief analyst with UK-based global logistics industry research and analysis company Transport Intelligence, generally agrees with the suggestion that reduced availability of components from European suppliers has forced some manufacturers in that region to source more from Asia and elsewhere. “Yes, that is correct. But I wouldn’t necessarily emphasise


China or Asia as sources in that context, it is more a worldwide trend. China, for example, also imports quite a lot of components. So it is a very mixed and unstable picture. Air freight’s role in those extended supply chains is to provide a response to difficulties and crises,” he added. Wolfgang Meier (left), executive


senior vice president of Russian scheduled B747 freighter service operator AirBridgeCargo Airlines, backs up the view that automotive industry sourcing of components and related air freight movements are very much global in nature.


To illustrate that point, he quoted AirBridgeCargo’s own


experience carrying both regular and ad hoc component shipments on its main routes linking Western Europe, Russia and the Far East. “We work with forwarders rather than directly with automotive companies, but we have noticed what might be considered some unusual component supply patterns,” he remarked. “For example, we carry auto components from Europe


into China but that does not mean they are automatically for European car manufacturers – it could be for a US or even a Japanese manufacturer because today’s sourcing is quite global. We also fly some automotive industry electronic components out of China into Europe.” Transport Intelligence’s Cullen was less supportive of


the suggestion that the global recession has prompted automotive manufacturers to take strategic decisions to


AIR LOGISTICSCHINA 19


CHINA is set grow its lead as the world’s largest vehicle market during the second half of this year, even though sales growth in 2010 has slowed to a low double-digit rate compared with 50 percent in 2009. That, at least, is the prediction made by


J D Power and Associates, a leading global marketing information services company based in the US, in its latest assessment of worldwide automotive market prospects published in July. Assessing the global picture, J D Power


suggested that a slowdown in US new vehicle retail sales during June, coupled with increasing uncertainty in the European automotive market, indicated that recovery in established automotive markets might be flagging. “As a result, sales growth in emerging markets – particularly Brazil, Russia, India and China – will become increasingly important to sustaining global recovery.” John Humphrey, J D Power’s senior vice


president of global automotive operations, explains that “the centre of the automotive universe is shifting quite rapidly away from the established markets of North America and Europe”. “It is the Asia Pacific automotive


market that is turning into the global powerhouse,” he said. “Sales in the region are forecast to grow by 16 percent year over year, to end 2010 at 27.9 million units. China is doing the heavy lifting, even though there are signs that growth in the China market is slowing slightly.” However, Humphrey continued, while


China’s projected 20 percent increase in vehicle sales this year might seem low compared with earlier peak period sales growth rates which once approached triple-digit figures, volumes are still projected to reach 15.6 million units for 2010. “This would once again position China as the world’s largest vehicle market, with sales more than three million units higher than that of the US.”


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