Ceva Logistics is focusing on working with auto producers and setting up an efficient supply chain to reduce logistics costs in China. Provided to China Daily

 

Dutch firm counts on cost cutting to appeal to Chinese customers

As the country's car industry goes through a process of reincarnation, from one based almost solely on sales of brand new cars to one in which pre-owned vehicles are becoming common, plenty of other industries are cheering.

One such is Ceva Logistics, the world's fourth-largest third-party logistics provider by revenue, which is helping drive its growth in China's huge automotive logistics market.

Third-party logistics companies typically specialize in providing full supply chain solutions, such as design and implementation, warehousing and transport services that can be scaled and customized to customers' needs based on market conditions, specific demands and delivery requirements. These services often go beyond logistics and include value-added services related to producing or procuring goods.

Attracted by the strong growth in China's automotive industry, Ceva of the Netherlands is focusing on working with auto producers and setting up an efficient supply chain to reduce logistics costs to seize more market share in China.

Martin Thaysen, executive vice-president of Ceva Logistics China, says China is a must-win market for Ceva. The company is building capacity and leveraging its global network to meet China's demand for different vehicles domestically and globally, he says.

Since China has become the global automakers' revenue powerhouse, an increasing number of foreign carmakers have set up joint ventures with Chinese companies, and they have synchronized the launches of new models in China with the those in the US and Europe.

The China Association of Automobile Manufacturers says China's auto production and sales set a world record for the fourth consecutive year last year.

In China last year, 19.27 million vehicles were made, 4.6 percent higher than in the previous year. Domestic sales rose 4.3 percent on 2011 to 19.31 million vehicles.

Ceva was formerly known as TNT Logistics, a division of TNT, which was founded in Australia in 1946. The company was an early entrant in China, in 1988, and established its first automotive logistics joint venture, Anji-Ceva Automotive Logistics Co Ltd, with SAIC Motor Corporation in Shanghai in 2002.

The joint venture employs more than 10,300 people, operating 25 vehicle centers, 15 regional distribution centers and 14 parts warehouses all over China, covering more than 250 cities, serving 465 suppliers and 2,200 dealers. Its biggest customers in China have included General Motors, Ford Motor Co, Toyota Motor Corp, BMW AG, and Volkswagen Group.

Encouraged by the booming demand of the domestic market, Chinese commercial vehicle makers such as Great Wall Motors Co Ltd, SAIC Motor Corp Ltd and Chongqing Lifan Industry (Group) Co, are also eager to export. The nation exported 1.05 million vehicles last year, mainly to Russia, South America and Africa, almost 30 percent higher than in 2011.