Automotive News EuropeRENNES, France - North American auto suppliers want to go global. Automobiles Citroen wants to help.
Citroen is putting its worldwide network of parts warehouses at the disposal of North American suppliers in hopes of turning the traffic into a profit center.
The automaker's internal logistics company - Gefco Group - says it will begin trans-Atlantic parts shipments this month. Other companies are in talks with Gefco officials, said Allain Bre, head of Gefco's automotive logistics in Rennes.
The Citroen unit will deliver Borg-Warner parts from a plant in Oklahoma City, Oklahoma, in the USA to BMW and Daimler-Benz.
Gefco operates 28 service centers across Europe, along with some 225 trucks and about 4,000 railway cars. It also operates port facilities in France and Spain.
The inhouse shipping company currently makes about 31,000 deliveries a day. Its port facility in St. Nazaire, France, shipped 165,000 Citroen cars between France and Spain last year.
'We have a large network of facilities to provide service to other companies,' Bre said.
He acknowledged that other European ports, such as Rotterdam, would offer a closer link to auto assembly plants in Germany. But he reasoned that port proximity is not the key issue for global trading.
'The first issue is the quality of service,' he said. 'If the quality is good, the distance isn't the issue. Rennes is a gate for Europe.'
Citroen was already in the position of moving auto parts out of the USA.
A handful of US suppliers sell goods to Citroen's French factories. Since it has the existing infrastructure to gather and ship US goods for a fee, the expansion into shipping parts elsewhere in Europe is a natural step, Bre said.
Citroen's willingness to serve as a freight forwarder for its competitors grew out of the company's push to create new revenue sources. In recent years, Citroen has opened its French parts warehouses to distribute consumer goods within France, including cosmetics and appliances.
Such services may come at an opportune time for the auto parts industry. Many US firms have been pushing sales to Europe over the past few years. A flurry of European acquisitions has created new business links between US firms and European automakers.
Outsourcing their logistics concerns may simplify the expansion process for US firms who have inherited new contracts. Few suppliers are large enough to warrant the scale of European distribution of a carmaker like Citroen.
At the same time, both small and large suppliers may jump at the chance to outsource their logistics as customers push for cost and efficiency gains.