North America Automotive Logistics Market Is Driven By Increasing...

North America Automotive Logistics Market Is Driven By Increasing Automotive Production

Posted 2024-02-23 07:31:55

The North America automotive logistics market consists of logistics services and solutions used for managing the movement of automotive parts, vehicles and equipment across the supply chain. These include transportation, warehousing, packaging, inventory management and integrated logistics solutions. Road transportation accounts for the major share, owing to increased flexibility in transporting vehicles. Rail transportation is preferred for long distances due to cost-effectiveness. Sea and air transportation also play a role based on the time sensitivity of deliveries. companies are leveraging warehouse management systems and IoT technologies to achieve better visibility and efficiency.

The Global North America Automotive Logistics Market is estimated to be valued at US$ 86.07 Bn in 2024 and is expected to exhibit a CAGR of 7.4% over the forecast period 2024 to 2030.

Key Takeaways

Key players operating in the North America Automotive Logistics are Diageo, William Grant & Sons, Castle Brand, Jameson Irish whiskey, and The Old Bushmills Distillery Co. These companies provide transportation, warehousing, packaging and other integrated logistics services to automotive OEMs across North America.

The growing demand for vehicles across US and Canada due to increasing disposable income levels is augmenting the need for efficient logistics of raw materials and parts to automotive plants as well as transportation of finished vehicles to dealerships. This is supporting the growth of third-party logistics providers in the region.

Major automotive companies such as Ford, GM and Fiat Chrysler are also expanding their operations by setting up newer plants across US and Mexico. This is creating opportunities for logistics providers to expand their warehouse footprint and transportation networks to cater to the global supply chain requirements of OEMs.

Market drivers

The increasing automotive production in North America driven by strong sales is one of the key drivers for North America Automotive Logistics Market Size . According to OICA, around 15 million vehicles were produced in the USA in 2021 indicating a growth of over 2% compared to 2020. With continuous rise in production volumes, demand for supporting logistics services is expected to increase substantially during the forecast period.

Impact of geopolitical situation on North America Automotive Logistics Market growth

The North America automotive logistics market is facing challenges due to geopolitical tensions between US, Mexico and Canada. Heightened trade tensions such as imposition of import tariffs are negatively impacting automotive part shipments across borders. Additionally, the COVID-19 pandemic has disrupted automotive manufacturing and supply chains in the region. This has weakened demand and halted vehicle production. Looking ahead, market players must focus on diversifying sourcing, localizing part production and building flexibility within their logistics networks. Collaborating with local automakers to source critical parts can help address political uncertainties. Investing in new technologies like AI, blockchain and IoT will make logistics operations more resilient. Adopting sustainable practices and promoting eco-friendly vehicles can also help gain political support needed for long term growth of the market.

Concentration of North America Automotive Logistics Market in terms of value

The North America automotive logistics market is primarily concentrated in the US, Canada and Mexico in terms of value. The US accounts for the lion's share due to presence of leading automakers like General Motors, Ford and Tesla. Additionally, states such as Michigan, Indiana, Ohio and Illinois serving as major hubs for vehicle and component manufacturing attract high automotive logistics investments. Meanwhile, Mexico has emerged as an important outsourcing destination for American automotive companies. The country ships most of its vehicle exports worth billions of dollars annually to US and Canada. It is estimated Mexico's share in the overall North America market will increase significantly during the forecast period.

Fastest growing region in the North America Automotive Logistics Market

Mexico is projected to witness the fastest growth in the North America automotive logistics market during 2024-2030. This can be attributed to rising investments by global automakers to set up manufacturing plants. Companies like Volkswagen, Audi, BMW and Nissan are expanding their footprint in Mexico to leverage the country's low-cost skilled workforce. Furthermore, Mexico remains the top supplier of cars and auto parts to the US due to established cross-border logistics corridors under USMCA agreement. As Mexican vehicle exports scale new highs year-on-year, requirement for integrated logistics services will spike in tandem. The market will also gain from infrastructure projects around key automotive clusters to aid efficient material movement.