Auto firms move manufacturing closer to demand

24 June 2013

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24 June 2013 | Adam Leach

Car manufacturers are setting up factories closer to the markets showing the strongest consumer demand, according to a report.

Lean and resilient: the new automotive supply chain hybrid, published and commissioned by DHL Supply Chain, found that firms are regionalising production to complement increasing demand from countries such as India and China. The white paper, which is based on market analysis and interviews with top auto firms, identified the relocation of assembly as one of the biggest trends.

Mike White, senior vice president of the global automotive sector at DHL Supply Chain, said: “The goal is to build a resilient supply chain that can tackle conditions of systemic volatility, good and bad, ranging from the ordinary to the unimaginable.”

The paper suggested that despite the bleak global economic climate, automotive production would hit record levels over the next year thanks to continued demand from China and India.

It also found companies are increasingly producing a range of models in individual factories to increase their ability to respond to changing demand.

The increased flexibility and localisation, was attributed to a “huge” increase in pressure on companies to reduce costs and support growth in emerging markets.

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