Car Carriers demand action in the face of crash

The automotive producers association, ACEA, may be reporting record truck sales in Europe, whilst car sales continue to edge higher, but the head of a key logistics trade organisation is foreseeing dark times ahead.

Constantino Baldissara President of the ECG, which represents European finished vehicle logistics companies, forecasts a crisis as severe as that of 2008-9 driven by the problems of the Eurozone. "We are very much afraid that we will see a 2008, equal to Lehman Brothers, a European Lehman Brothers".

His solution is a renewed programme of scrappage incentives, modelled on that of the Italian scheme offered in 2009. Speaking at the organisations annual conference he asserted that "if you look at the scheme offered by the Italian government in 2009 it offered people the money to buy a new car yet made a profit for the Italian government".

Of course there is a divergence in prospects between the producers in the Eurozone. Germany may not be experiencing the boom in exports seen in 2010, but world demand for its products is still pointing upwards. Not so in France or Italy. Their markets are much more vulnerable, prompting Balidissara to remind the authorities that "Europe should not just be run with the interests of one country".

If Baldissara is correct, the finished vehicle logistics sector will undergo severe stress with many companies facing the probability of bankruptcy. Three years ago the dramatic fall in sales and production shook the sector, with many LSPs facing a cash crisis. Yet the rapid rate of recovery led to a boom in areas such as car-carrying shipping.

Baldissara warned that the consequences of such a crisis would be a contraction in the volume of transportation and other logistics assets. The car-carrying truck fleet in Europe is already ageing and without further investment the sector may not be able to cope with the demands of the car makers in the medium term.

However, it might be suggested that this is precisely what the sector needs. A shortage of capacity will drive-up margins, whilst teaching a lesson to the vehicle manufacturers who have for years treated their suppliers ruthlessly.

Quelle: eyefortransport
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