The automotive sector plays a crucial role in global trade, accounting for around 11% of manufactured goods. However, recent tariff tensions are shaking up the trade landscape, creating a more complex environment for the industry, according to analysts at Bernstein.
With a supply chain that spans multiple tiers and encompasses approximately 15,000 parts in a typical vehicle, the automotive sector has long relied on global trade networks. China may dominate overall trade, but when it comes to autos, Europe takes the lead, as noted by Bernstein.
While a significant portion of automotive exports from EU countries remain within the EU, exports to other regions make up a sizable percentage of the market. The shift towards electric vehicles is also reshaping the industry, with China poised to control the majority of battery manufacturing by 2030.
The transition to electric vehicles not only impacts the number of components in a vehicle but also necessitates changes in logistics and trade agreements. Tariff increases on EVs, particularly between major players like the U.S., EU, and China, are altering global supply chain dynamics.
As a result, there is a growing need for more sophisticated logistics services to navigate the increasingly complex trade landscape. Companies in the automotive sector must adapt to these changes to effectively manage new goods and spare parts flows.
In a time where political trade consensus is waning and protectionist measures are on the rise, the structure of global automotive supply chains is evolving. Bernstein predicts that more goods will flow through intermediary countries, leading to a shift in traditional trading routes.
Overall, the changing trade environment is expected to drive demand for innovative logistics solutions, creating opportunities for growth in the freight forwarding sector. The automotive industry is entering a new era of trade dynamics, and adaptability will be key to navigating this evolving landscape.