Auto manufacturers around the world are trying to strengthen their existence in
the Chinese market which has expanded steadily compared to the sluggish market
in advanced countries. Interests have been growing on the inland market where
the domestic demand has rapidly expanded due to large developments in the West.
Although several state-owned automotive parts manufacturers exist in China, the
production of high-tech parts which characterize today’s car manufacturers is still
limited. Therefore, foreign car manufacturers which had entered the inland market
are obliged to procure large amounts of auto parts from China’s coastal areas
or from other countries. For Japanese car manufacturers, which have intrinsic
policies to reduce inventories, procurement of parts more efficiently has become a
vital issue in inland China where logistics infrastructures such as expressways and
railways have not been well developed.
By taking up two Japanese car manufacturers (Sichuan FAW Toyota Motor Co.,
Ltd. (SFTM) and Chengdu Toyota Boshoku Automotive Parts Co., Ltd. (CTB))
located in Sichuan, Chengdu as case studies, this paper discusses how these
firms have successfully established the parts procurement network and the type
of distribution systems they have developed to cope with the difficult logistics
infrastructure conditions in inland China. Furthermore, an analysis on the viability
of the Yangtze River for long-distance transport is done using the results of field
surveys conducted in August 2009.
II. Literature R