Logistics leaders meeting in Shanghai last week learned that collaboration with local supply chains should take priority over the drive for an immediate profit in China’s booming automotive market. With cost savings from low labour and parts being offset by high logistics costs, foreign companies must lay the logistics foundations now, to reap the long-term profits predicted for the future. 

Zengrong Ma, The vice general secretary for the automobile association of the China Federation of Logistics & Purchasing (CFLP) warned OEMs that immediate gains in the market would not be straightforward: “For the first years you should not focus or give priority to how much money you make here. It’s more difficult to make a one Renminbi profit here than one Euro.”