Evolving buying patterns results in need for accelerated production switchover as diesel sales continue to fall, increasing premium freight demand.
Latest figures published in a report by ACEA, the European Automobile Manufacturers Association, showed a global 17% drop in diesel sales over 2017 figures, with gasoline vehicles increasing their share by 14.6%1. Electrified powertrain also saw a significant percentage increase in popularity. This rapid shift in buying trends is placing increased pressure on vehicle manufacturers to switch complex production between the two fuel types, which is driving up the demand for premium freight solutions as a means of bridging potentially volatile supply chain links.
“Vehicle manufacturers and their suppliers are seeking to safeguard production by ensuring that a switch from diesel to gasoline production is as smooth as possible,” explains Evolution Time Critical managing director, Brad Brennan. “Premium freight expertise is able to provide a safetynet by helping to align lead-times and ensure a robust flow of components in the aftermath of remarkably unpredictable forecasts.
“A slowdown in production of one vehicle type coinciding with a ramp-up of another poses a two-fold conundrum for suppliers and supply chain controllers, which manifests as a complex balancing act,” explains Brennan. “The aim is to enable a seamless transition, which requires the avoidance of potential bottlenecks, the advancement of some shipments via air charter and the circumvention of excess supply where it is no longer required.”
The report also highlights another factor that adds production and supply chain complexity: it demonstrates that the change in consumer buying preferences stretches beyond their favoured fuel type.
“According to the ACEA report, Americans are buying more European cars – the market now represents 27% of European manufacturers’ exports, totalling €8.8m for the first quarter of 20181, and US production dropped by 3.4% year-on-year during this period,” Brennan concludes. “This trend is synonymous with globalised supply chains. Production trends and supply chain flow that fluidly evolve require suppliers to demonstrate a growing level of agility, which can be enabled by working closely with an emergency logistics partner.
“Demand for transatlantic premium freight solutions is increasing at an accelerated rate amid changing consumer buying habits and taste, and the growing market for European OEMs in America has led to increasing demand for premium freight and the opening and subsequent growth of our North American Control Center in Atlanta GA. Manufacturers and suppliers appreciate the value of having experts in both locations who are up to speed with latest legislative nuances or most efficient trade routes.”
1ACEA Economic & Market Report