Asia Pacific Finished Vehicle Logistics Market - Growth, Trends, COVID-19 Impact, and Forecasts (2023 - 2028)

Asia Pacific Finished Vehicle Logistics Market - Growth, Trends, COVID-19 Impact, and Forecasts (2023 - 2028)

The Asia Pacific Finished Vehicle Logistics Market is expected to grow at a CAGR of 5% in the forecasted period.

The Asia Pacific Finished Vehicle Logistics market is demonstrating significant growth across multiple key indicators as it is projected to reach a total value of USD 209.90 billion by 2021. This growth is anticipated to be spurred by an increase in the scope and number of automotive companies using multiple logistics services due to changing customer preferences and the rapid development of e-commerce.

Additionally, increasing production of vehicles, especially three-wheeled vehicles, in countries such as India, Thailand, and Bangladesh, is expected to drive the demand for finished vehicle logistics services in the Asia Pacific region. Additionally, the implementation of a better regulatory framework targeting to ease the transportation of goods across the supply chain, as well as the presence of well-established automaker models, will positively influence the growth of this market. Moreover, strategic collaborations between logistics companies and automakers to increase efficiency will also further enhance market growth.

Developed countries such as Japan, China, and South Korea are the key contributors to the regional market share. Japan is the major contributor to the regional market, followed by other countries such as China, India, and Australia. Regulatory framework changes targeted at easing goods transportation across the supply chain will further stimulate growth for this industry in the Asia Pacific.

This rise can be attributed to the emergence of e-commerce, changing customer preferences, and increased production of three-wheeled vehicles in India, Thailand, and Bangladesh. Strategic collaborations between automakers and logistics companies to enhance efficiency have also positively impacted the market.

The impact of the Covid-19 pandemic on the Asia Pacific finished vehicles market has been significant. The market has suffered from a drop in demand, an ongoing shortage of parts, and supply chain disruptions. This has been due to the closure of factories, restrictions on transportation, an extended lockdown of major production centers, and a dramatic reduction in the number of customers due to lockdowns. The market has struggled to adjust to the changing conditions brought by the pandemic. Many automotive manufacturers have been pushed to the brink, and some have ceased production completely. The decrease in demand caused by the pandemic has resulted in a sharp decrease in production, with some markets being particularly hard hit. Japan, Thailand, South Korea and India are the most affected markets, with an estimated total of 41.3% reduction in production in 2020. This has led to an estimated drop in sales volume of 9.2%, with only an estimated 9.7 million vehicles produced in 2020.

The surge in outsourcing activity will be driven by several factors such as rapid growth in automotive production, the need for efficient transportation, and the need for advanced technology services. Other factors such as the expanding digital supply chain capabilities, widespread e-commerce adoption, and government support for logistics and transportation services are also driving the growth. The automotive logistics outsourcing market in the Asia Pacific region is highly competitive, as several global and local players are competing for business in the region. However, logistics providers are increasingly focusing on providing customized services, such as contract logistics, warehousing, and transportation based on customer preferences. In addition, third-party logistics is gaining traction as the automotive industry is seeking cost-effective supply chain solutions. The increasing demand for advanced logistics services such as 3PL and 4PL is expected to be a major factor that will drive market growth in the region.

The Asia Pacific region has experienced rapid growth in the electric vehicle (EV) sector, due largely to increasing consumer demand for eco-friendly vehicles. With this surge in EV adoption has come more pressure for EV fleet operators to increase their operational efficiency and reduce their logistical costs. To do this, fleet operators must reduce their reliance on traditional fuel-based logistics and embrace more sustainable solutions. There are several strategies to reduce the reliance on fuel-based logistics and increase efficiency in the EV fleet. The first is to facilitate the use of pooled EV fleets. Pooled EV fleets allow multiple companies or organizations to share the same EV fleet, reducing their reliance on traditional fuel-based logistics. Pooled EV fleets can also enhance vehicle logistics by standardizing EV fleets and providing greater access to vehicles with the latest safety technology. Second, deploy advanced data management systems that offer route guidance optimization and support more efficient transportation routes along with reduced fuel consumption. Finally, fleet operators should invest in gaining deeper insights into their operations through telematics systems if they wish to strengthen their logistical capabilities even further.

The Asia Pacific Finished Vehicle Logistics Market is currently on an upward trend across the region, driven both by the continued growth of the automotive industry and the rising demand for affordable, efficient logistics solutions. The automotive industry in the region is booming, and this will mean an increased demand for shipped vehicles across the region. In addition, governments are investing in infrastructure to address the region's logistics challenges, further improving the market environment. Lastly, with countries in the region investing heavily in logistics technology, the market is expected to grow even more over the next few years. The Asia Pacific Finished Vehicle market is highly fragmented, with several companies competing against one another. Several key players engage in the development of innovative products, to expand their product portfolios. Some of the key players operating in the market are DHL, DSV, CEVA Logistics, Kuehne + Nagel, and many more.

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