AI Regulation, Tariffs, and Chinese Competition Pose Challenges to European FVL Market

The European automotive logistics sector is facing a challenging outlook, with a flat market outlook due to geopolitical uncertainty, inflation, trade barriers, tariffs, and competition with China. According to the Association of European Vehicle Logistics (ECG), the European FVL market is expected to contract by around 1.7% this year. However, the ECG is cautiously optimistic about the growing Chinese competition in the European FVL landscape.

ECG has developed business intelligence reports, forecasting tools, and good practice methodologies for its member groups. In a bid to support the presence of Chinese Original Equipment Manufacturers (OEMs) in Europe, the ECG has entered into a future collaboration agreement with members. This includes companies like SAIC Motor (with its subsidiary Anji Logistics providing logistics for MG and Great Wall Motor), BYD with its European manufacturing plans in Hungary, and Autolink, a Chinese intelligent automotive technology company empowering OEMs' vehicle upgrades in Europe.

Chinese OEMs, including Anji, are expected to rely on existing European structures and facilities due to lack of time to create their own supply chains. The ECG is in talks with Anji for potential collaboration, recognising the need for Chinese OEMs to access the European market effectively.

The increasing Chinese presence in the European FVL market is not seen as a threat by the ECG, but as an opportunity. The ECG aims to ensure shared standards, avoid disruption, and facilitate market access as Chinese OEMs expand their presence in Europe. In this regard, the ECG has formed an agreement with the Chinese Association of Finished Vehicle Logistics (CALA) to boost future collaboration with members.

The integration of Artificial Intelligence (AI) is promising for efficiency and redundancy reduction in vehicle logistics. However, it is currently constrained by data fragmentation, proprietary platforms, competitive risk concerns, and increasingly stringent regulations. The ECG Academy and Digitalisation Working Group plan to expand their support for members experimenting with AI, particularly in operations such as yard planning, dispatch allocation, and back-office administration.

The ECG also aims to bring more awareness towards policymakers and regulators about AI usage in the industry, including FVL, which is sometimes overlooked or not visible. The EU AI Act, introduced by the European Commission, may regulate AI and hinder its development.

Wolfgang Goebel, president of the ECG, expects the market to remain stable and flat. However, he believes that the European FVL's outlook does not only depend on trucks, trains, and vessels, but for ECG, it's about how the sector adapts, collaborates, and innovates under pressure. The ECG is committed to supporting its members and the European FVL sector in navigating these challenges and seizing the opportunities presented by the growing Chinese presence in the market.

AI Regulation, Tariffs, and Chinese Competition Pose Challenges to European FVL Market