Automotive Logistics Market Exceed to $472.9 billion by 2025 | MarketsandMarkets

The Automotive Logistics Market is projected to grow $472.9 billion by 2025, at a CAGR of 7.55%.

Increase in vehicle production and demand for raw materials and components are the key drivers for the growing logistics market. Also, infrastructural development in developing countries has given a boost to the automotive logistics market.

Opportunities:

1. Implementation/Usage of Driverless Vehicles
2. Usage of Blockchain for Efficient Logistics Operations

The automotive logistics market is consolidated and dominated by a few global players. The key players are DHL (Germany), XPO (US), SNCF (France), Kuehne + Nagel (Switzerland), and DSV (Denmark).

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Transportation is estimated to be the largest segment of the automotive logistics market during the forecast period

Increasing global vehicle production has increased the demand for logistics services for the transportation of automotive components, accessories, spare parts, and finished vehicles. Due to low labour costs and taxes, Asia has become the hub of automotive production. It accounts for 55% of the global passenger car and LCV production. In the automotive logistics supply chain, transportation of components, accessories, spare parts, and finished vehicles is more expensive. These vehicles and components are exported to Europe and North America and require a multimodal mode of transport. According to experts, the introduction of electric vehicles will cause major changes in the automotive logistics supply chain. The logistics services for transportation and handling of batteries are expected to account for a significant part of inbound logistics.

Warehouse to have the fastest growth in this market during the forecast period

The key players operating in the logistics industry also offer warehousing services to OEMs as well as Tier I/Tier II component manufacturers. These services offered by logistics providers ensure that OEMs can deploy just in time (JIT) and just in sequence (JIS) assembly line production. The demand for these services depends on vehicle production. Hence, the regions with higher vehicle production will have a larger share in the warehousing market. In addition to warehousing, logistics service providers also offer assembly services for OEMs. For instance, DSV provides component assembly and warehousing services for Volvo Cars at Ghent, Belgium. Volvo manufactures its XC60, S60, V40, and V40 Cross Country models at the plant. During the forecast period, the warehouse segment is expected to witness the fastest growth due to the pre-assembly of components and increased vehicle production.

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Maritime logistics is estimated to be the fastest-growing mode of transport in the automotive logistics market

The transportation of cargo through waterways is more economical than roadways and railways. It does not require a huge capital investment in construction and maintenance, except in the case of canals. Various countries such as France, Germany, Spain, China, India, and Brazil are working toward increasing the share of maritime transport in the logistics industry through investments and favourable policies. For instance, the European Union is working on 5 priority infrastructure projects that include 3 rail-marine projects and 2 inland waterways projects. Thus, marine logistics is estimated to witness the fastest growth during the forecast period.

Asia Oceania is expected to account for the largest market size during the forecast period
The automotive logistics industry has witnessed substantial growth, particularly in emerging economies such as China and India. Asia Oceania is expected to witness an annual growth of 7-8% in line with global growth during the next 8 years. The region has witnessed growth in automotive production due to low wages, availability of raw materials, increased demand for vehicles, and the presence of major OEMs such as Toyota (Japan), Maruti Suzuki (India), SAIC (China), Honda (Japan), Geely (China), and Hyundai (South Korea). China, Japan, India, and South Korea export vehicles to various countries in Europe and North America.

The Belt and Road Initiative, which aims to strengthen infrastructure, trade, and investment links between China and several other countries, is among the several infrastructure projects that are expected to drive the market in the Asia Oceania region. The Indian Railways is working toward improving its logistics services with the development of 6 dedicated freight corridors (DFCs) that span 2800 km across the eastern and western regions of the country.

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