The DHL Automotive Sector Guide

What trends are set to shape the automotive industry this year? With AI in the picture, the answer is more innovative than you may imagine. In this guide, we explore what the sector will look like in 2024, and the best practices for automotive supply chain optimization.

AUTOMOTIVE SUPPLY CHAIN TRENDS 2024

EV sales slowing – but not stalling

It seems only natural to begin by looking at electric vehicles – a trend that has, arguably, been the most transformative to the automotive sector in recent times (whilst giving Elon Musk the enviable title of one of the world’s richest men.)

The electric vehicle (EV) market has enjoyed rapid growth in the last five years, but it is set to slow. Whilst global EV sales are forecast to increase 36% year-on-year in 2024, this compares to 62% in 2023¹. Industry reports point to an oversaturation of manufacturers, slowing demand in China, and automotive supply chain challenges.

Cost is also a significant factor; battery car models often come with premium price tags, and with global inflation at record levels, many consumers are reconsidering such a purchase. Indeed, in a survey by Deloitte, price was cited by most consumers* as the leading influence over their choice of car brand² (*in developed markets).

Amidst consumers’ tightening budgets, it’s unsurprising that the global used car market is growing. In 2023, it increased by 3-4% – with sales of over 90 million vehicles – and is forecast to grow by 5-6% this year³. But what may be surprising is how many of these sales will be online. Car buying is typically associated with bricks-and-mortar dealerships, yet the industry is changing, driven by young, tech-savvy consumers looking for convenient online experiences.

Last year, Amazon announced a partnership with Hyundai to sell vehicles on its platform in 2024. Customers will be able to search for available models from local dealers via the site, and then check out online with their chosen payment and financing options – with the car later delivered by the dealership.

Automotive supply chain management – is AI the answer?

Whilst cars sold online may be a new concept, autoparts and e-commerce have a longer standing relationship. With globalization, a customer looking for tires or engine blocks, for example, now has access to a wide range of products from manufacturers across the world at competitive prices and with convenient delivery options.

Despite this growth, there are currently many automotive supply chain challenges – notably, semiconductor chip shortages and geopolitical disturbances. In fact, since 2020, 70% of major car manufacturers have experienced line stoppages, with approximately half citing supply chain issues⁶.

In response, many of these businesses are utilizing Artificial Intelligence within their smart factories to reduce such risks. For example, the technology can help with parts sourcing – machine learning analyzes historical data to predict demand and speed up procurement cycles. This helps the business to run a more agile supply chain. 

Beyond automotive supply chain optimization, AI is also being applied to the design side. In an industry that demands innovation, the tech is enabling designers to push boundaries and explore new edges of creativity. Over the next few years, expect to see EV brands in particular lean into AI to create experiences that inspire consumers and re-capture some of the sector’s lagging sales.

AUTOMOTIVE INDUSTRY LOGISTICS GUIDE

Businesses wanting to ship and deliver automotive parts domestically or cross-border will need to follow these best practices to ensure a smooth journey.

• Each car part should be packed separately using bubble wrap, with sharp edges carefully covered.
• Use foam packing, polystyrene or bubble wrap for the interior of the box to provide better protection from shock, vibration, and damage.
  
• Metal items should be packed in heavy duty or corrugated cardboard cartons.
  
• Use triangular-shaped boxes for tube-shaped car parts.
  
• Empty chemicals or lubricants within the parts to avoid leakage.
  
• Add a “handle with care” label to the box to indicate if the part is fragile.

DHL Express offers a fixed price, time-definite international service for heavy and large shipments. As it relies solely on air and land rather than sea freight, it’s more resilient against some of the market disruptions currently impacting freight forwarding services, making it a good option for automotive parts delivery.

Click here for a guide to shipping large/heavy items with DHL Express, including:

• Weight and size limits
  
• A dedicated packing guide for large and palletized goods

Classification: Countries have different regulations governing the shipping of car parts, but most consider automotive components to be Dangerous Goods. In such instances, you will need to acquire special licenses and permits from customs authorities before shipping them out of the country. All parts containing liquids such as radiator coolant, engine oil and brake fluids must be removed as they are considered hazardous. A certificate stating the parts have been purged of their fluid content may need to be obtained.

Required documentation: When shipping auto parts cross-border, you’ll need to submit some paperwork to clear the goods through customs. Typically, this includes a bill of lading, a packing list, a commercial invoice, export licenses, and other documents concerning the exportation of Dangerous Goods. A detailed guide can be found here.

Taxes and Duties: These are dependent on the regulations of the destination country. All cross-border shipments must include HS codes and detailed descriptions of the contents, as customs officials will use this information to calculate the taxes and duties which must be paid before the shipment is cleared.

Overwhelmed? As international shipping experts, DHL Express can help your business navigate all customs issues – including submitting necessary documentation on your behalf – so that your shipment is never delayed at borders.

DHL Express has all the tools to help your business ship to customers seamlessly, wherever in the world they may be:

• MyGTS (My Global Trade Services), a free, user-friendly platform that will help you navigate all aspects of international shipping regulations. Access accurate HS Codes for your shipment(s), calculate Landed Cost for goods in any country, and receive guidance on import restrictions before you ship.
  
• DHL Express Commerce. Integrating with a large range of e-commerce platforms – including Shopify – this tool manages every step of your fulfilment process, from order importing to shipping, leaving you with more time to work on your business.
  
• Dynamic Discounting. A competitive pricing program that rewards you with increasing discounts as your shipping volume grows, so the more you ship, the more you save. For in-depth cost estimates, speak to your Account Manager.