Disasters highlight importance of logistics for car industry
Local companies to invest in warehousing
Dubai The dependence of the global car industry on well-oiled logistics to back it up was brought into sharp focus by disruptions caused by last year's tsunami in Japan and floods in Thailand.
The impact was particularly harsh for car makers in Japan but also affected dealerships in the UAE.
It then makes sense for them to continually top up investments in their warehousing and logistics operations. The AW Rostamani Automotive Group has just done so with a brand new 600,000 square foot spare parts facility in Dubai Industrial City.
It will house a substantial 90,000 line items for the brands the dealership represents, including Nissan, Renault, the Chinese marque ZNA and the Chinese owned MG.
"The facility is now our largest parts distribution centre for the group," said M.K. Rajkumar, director for after-sales and trading. "Our existing parts storage facilities had reached capacity and this move to DIC will also future-proof our storage needs in the mid-term."
Commitment
According to industry sources, other local dealerships are expected to take the same path. Last year's disruptions in supplies from Japan and Thailand have instilled in them the need to widen their supply sources as well as carry more stock on their own. One leading dealership representing a Japanese brand is considering plans to upgrade its present facility or go for a brand new one.
However, Rajkumar confirmed the new warehouse did not mean the group's inventory strategy had altered radically. "This facility carries 14 weeks of stock at any given time — a stocking level and commitment to customers that we have always maintained," he said, "We can manage any temporary supply disruption until it is restored."
The AWRostamani Group's spare parts warehouse and distribution centre can handle more than 100 incoming containers and 250 outbound deliveries a month.
The combined value of the stocks on hand at any given time is valued at Dh150 million. Apart from meeting the Group's own requirements, supplies will also go out to a further 103 approve spare parts dealers in the UAE.
