High logistics costs put the brakes on China’s automotive sector

ED RICHARDSON CHINA’S low -cost advantages are being counterbalanced by high logistics costs, according to speakers at the Automotive Logistics China 2007 conference held in Shanghai in April. It was agreed that collaboration with local supply chains should take priority over the drive for an immediate profit in China’s booming automotive market. The conference heard that cost savings from low labour and parts were being offset by high logistics costs. In order to remain competitive, foreign companies had to lay the logistics foundations now to reap the long-term profits predicted for the future.