10 ROUTES 2 2007 ChINa auTO marKET bOOmS WWL ServiceS in china Ocean services (China express; shuttle service twice monthly from Japan to China; direct service to Europe and North Africa, monthly service from Guangzhou to Europe). The plan now is to strengthen the ocean product from northern China outbound. Technical services: Pre Delivery Inspection (PDI) in Tianjin doing terminal handling and customer cleaning. Inland distribution: Managing Vehicle Distribution Centre (VDC) and vehicle distribution for BMW in southern China. Offices: Dalian, Tianjin, Shanghai, Guangzhou and Beijing. Ports: Tianjin, Shanghai and Guangzhou. Ad hoc from Dalian. Number of employees: 55. <strong>Wallenius</strong> <strong>Wilhelmsen</strong> <strong>Logistics</strong> has had a presence in China for over a century. Records show that Wilh. <strong>Wilhelmsen</strong> vessels called at Chinese ports in the late 1880s. In 1994, the company was registered as a wholly owned foreign enterprise. Recently, China’s economy has boomed. As Trond Tønjum, Managing Director of <strong>Wallenius</strong> <strong>Wilhelmsen</strong> <strong>Logistics</strong> China says: “What we have seen in China is that the domestic market’s demand for vehicles is growing tremendously. For the next five years we estimate that it will double both in production and sales. Exports and imports are also growing, but with a moderate volume compared to mature markets. We expect these areas to triple during the same period.” During the 1980s and 1990s, western vehicle manufacturers rushed to set up joint ventures with local Chinese companies, the majority of which focused on sales in the domestic market. The export of western brands from these joint ventures has been low, due to the domestic focus and Chinese legislation. However, exports of Chinese brands such as Chery, FAW, Great Wall, Brilliance and SAIC are growing, mainly to the Middle East, North Africa, Russia, South East Asia and South America. in 2006, china ExportEd around 200,000 built-up, finished cars. According to Trond, trucks and buses are showing large export growth and will be very important for WWL China in the future. “Good sustainable logistics solutions will be increasingly important for the Chinese manufacturers as they enter western markets. Western demands are much more complex than those currently found in their own mar- ket. The Chinese need to get their supply chain management right to succeed,” Trond states. Meanwhile, within the domestic market, there is also a need for improved supply chains. Today, most Chinese manufacturers are strong in their local provinces and transport vehicles by truck from plant to dealer. As they start to expand their sales reach, there is a need to diversify distribution methods from being heavily dependent on road transportation to better use of river, coast and rail transport. Increased use of distribution hubs will be essential to improve domestic logistics. “WWL’s strategy is to cater for Vivian Zhang, team leader, Karl Yang and Liu Jun, <strong>Logistics</strong> Co-ordinators, carry out inspection for customs clearance on GEFCO import vehicles in Tianjin. exports and imports. However, understanding the domestic market is key when we procure land based distribution services on behalf of our customers,” Trond emphasises. It has not been difficult for WWL to win the trust of Chinese manufacturers to handle their shipments overseas. “We exported 70 percent of Chery’s finished vehicles last year,” says Trond. “It is a challenge to provide ocean capacity but we are building up our product offerings in China. It is a growing market and we will grow even more as we have a good position in the market based on our global reach.” However, at the same time he admits that, “Some customers have never even seen a RoRo vessel, others limit their logistics to truck transportation. We help them see the benefits of securing the quality and optimal solutions they need to expand their sales nationally and internationally.” thE pErsEvErancE and hard work is paying off and the contracts are increasing. The BMW contract has been renewed and WWL will distribute BMW vehicles in south China. “We see great potential to secure more contracts in this area, and are currently <strong>working</strong> with several manufacturers to come up with smart solutions to match their needs,” says Trond. While WWL’s products are developing in China, several challenges in this booming economy still remain. “In China, development can go very quickly, while other things can take time. This is not surprising as it is an emerging market and many things are done for the first time. To know and be part of the culture is the only way,” Trond explains. photo: richard ma
���������������������� ������������������ ������������� �� �� � � � � � ���������������������� �������� ����� ���� ���� ���� ���� ���� ���� ���� ���� ���� ���� ��������������������� ������������������� ��������������� ������� ��� ����������� ��� ����� �� ������������ ��� ������ ��� ��������� �������������� ����� ��� �������� ��� ������������������������������������������������������������������� Trond Tønjum, managing Director, WWL in China and Qi Yumin, President of brilliance auto, exchanging gifts in February this year at the loading of the first 500 brilliance cars in Dalian, destined for Europe. average auto sales growth in China over 5 year period 2007–2012 = % photo: richard ma ROUTES 2 2007 11
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