DHL Supply Chain report reveals new challenges in automotive industry

DHL Supply Chain, the contract logistics provider within Deutsche Post DHL Group, has published a recent trend report showing how the pandemic will create or speed up some trends in the automotive industry but also hinder others.

In “Automotive – A Shifting Landscape”, DHL gathered the latest findings from renowned research institutes, which revealed that the automotive industry is facing challenges through the rise in new technologies, a shift in customer expectations and a much stronger focus on Environmental, Social and Governance policies (ESG).

DHL Supply Chain said that OEMs must now learn to adapt to the challenges posed in the industry, with logistics experts needing to offer emission-saving transport or value-added services to support companies in achieving their ESG targets.

Dr Dietmar Steins, EVP Global Solutions Design at DHL Supply Chain, said that last year has made the importance of flexible and reliable supply chains very clear.

“The industry will transit into a new normal after the pandemic, with retail models changing and automation increasing. But these are not the only challenges OEMs will face in the future,” Steins revealed.

“We have to acknowledge the role logistics plays when it comes to sustainability. There are already lots of possibilities to support the automotive industry towards more environmental consciousness,” he said.

“We support our customers in implementing ongoing trends such as sustainability and digitalization into their supply chains,” he continued.

The study unveiled that there are several aspects which impact the automotive industry and which also create interdependencies on each other. Car manufacturers and their suppliers are exponentially moving towards electric mobility, while COVID-19 is shaping future trends and distorting past predictions.

Additionally, projects and capital expenditures that are not contributing to the immediate bottom line have been delayed. On a broader level, the COVID-19 pandemic has led some of the industry’s deepest-held beliefs about globalization and supply chains to be put under pressure.

As OEMs are affected by fixed costs with little or no revenue, the company said that investments in future trends such as self-driving cars have been trimmed or refocused. Online sales may also be starting to replace the “dealership experience”.

Researchers revealed that independent regional strategies will become more prioritised in the automotive industry, with localization or at least flexibilization of supply chains being key to the sector’s resilience.

With the rise of automation and connectivity, the industry is heavily investing in artificial intelligence and machine learning. In the age of data supremacy, OEMs are further migrating to a more service-and-customer-oriented model leading to changing retail models.

To make the industry more sustainable holistically and to comply with corresponding policies, the supply chain must also be taken into account. Sustainable solutions are required to get us on the way to greener mobility, the company said.

According to DHL Supply Chain, logistics service providers act as an extended arm to the customer. Therefore, a reliable partner with an extensive network is essential when setting up individualised supply chains.

Source: DHL 

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