Automobile Production and Distribution

Abstract

In this chapter we take a look at the ongoing globalization process of the automobile industry. Thereby we explain the increasing transportation volume currently observed in the face of a stagnating automobile production.

We argue that an increase in number is caused by two impacts. First, production is outsourced in order to benefit from lower salaries in transition countries. Furthermore, currency exchange risks are alleviated. Finally, a production close to foreign markets may help to conquer foreign markets. We show, that next to the obvious reasons above, also the organizational structure of a multinational firm accounts to the vehicle transport volume imposed.

We describe challenges for outbound logistics resulting from distribution strategies in a globalized production before we describe the hub and spoke concept as an answer of the transport industry to the demand raised by modern vehicle distribution. Finally we sketch benefits gained by logistics service providers who aim at the holistic support of a distribution network.