German group drawn by China's vehicle ambitions

BEIJING - German logistics service provider BLG Logistics Group officially entered the Chinese market by establishing a local joint venture on Tuesday, saying that it saw a promising future in the world's largest vehicle market.

Europe's biggest automobile logistics supplier signed an agreement with Beijing-based CINKO Supply Chain Management Co Ltd to form a 50-50 joint venture, BLG CINKO Autotec, in Tianjin to provide services for Chinese vehicle exports as well as imports of foreign cars.

The technical center will be the first project under their cooperation, which aims to be capable of handling 38,000 vehicles a year. They will jointly invest in similar facilities in Guangzhou, Shanghai, Dalian and Lianyungang, Jiangsu province. According to Manfred Kuhr, vice-chairman of BLG's executive board, the 134-year-old company's confidence in establishing itself in China was based on surging exports of German luxury vehicles to China starting in 2010, as well as German vehicle makers' expanding local production in China."BLG has for years helped European auto makers transport parts to China for local production. The latest example is our support to Daimler AG in transporting vehicle parts from its suppliers in Spain to its plant in Fuzhou, Fujian province, to produce Vito and Viano vans," Kuhr said.

"Cooperation with CINKO, which focuses on helping Chinese homegrown car brands deliver their vehicles to the world, will make full use of our facilities to carry Chinese cars and CKD (completely knocked down) parts when our ships leave China after finishing the logistics of bringing cars here," he added.

Detthold Aden, the company's president and CEO, said that the company also plans to expand its logistics service for inter-city inland transport. Although BLG only helped Chinese auto makers ship 17,000 cars to the Bremerhaven harbor last year, Kuhr said that BLG sees huge potential in Chinese auto makers' export ambitions."We have established mature and comprehensive logistics service networks in Brazil and South Africa, the latest hot destinations for Chinese auto makers to establish manufacturing facilities," Aden said.