New WLTP standards and new car buying patterns result in perfect automotive supply chain storm
The rise in prominence of Low Emission Zones (LEZ) in major cities and the future banning of older diesel vehicles is driving a downturn in diesel sales and a sharp rise in the popularity of gasoline and electrified vehicle powertrains. This shift in consumer buying habits is placing added strain on OEMs and suppliers of key emissions reduction components for gasoline engines, resulting in an increased reliance on emergency logistics expertise to sustain progressively lean supply.
The change in consumer buying is further compounded by New Worldwide Harmonized Light Vehicle Test Procedure (WLTP) standards, which all new vehicles must adhere to from September 1st. All new vehicles will publish new WLTP-measured fuel consumption figures from January 1st 2019 and are required to meet stringent new CO2 emissions targets 12 months later. According to emergency logistics expert, Evolution Time Critical, some large-scale vehicle manufacturers are facing additional downtime while switching to WLTP, while major Tier suppliers are expediting shipments using premium freight in order to meet the rising demand of components that enable reduced emissions and greater efficiency under the new standards.
“Suppliers of components that are vital to achieving reduced emissions under WLTP procedures have experienced an increased demand and an expectation for reduced lead-times as manufacturers battle to meet new legislation and consumers are physically buying more gasoline-powered cars,” says Evolution Time Critical managing director, Brad Brennan. “This has led to a perfect storm scenario whereby manufacturers are facing two separate requirements for increased short-term capacity: preparation for new legislation and the growing consumer demand for non-diesel powertrain. Put simply, nuanced new car demand exists that could not have been previously accounted for. We have consequently been working proactively with a number of suppliers who are seeking premium freight options that accelerate shipments through air charter to manufacturers.
“In recent years,” concludes Brennan, “vehicle manufacturers have identified the vital safety net provided by working with an ultra-responsive logistics partner; such safeguarding can become a vital competitive advantage when the industry is adapting to new legislation. We will continue working proactively with manufacturers to avoid prolonged interruptions that could lead to finished vehicle shipment delays.”