Case study: Automotive parts logistics – Market entry study for ASEAN distribution centre

The challenge

A leading global motorcycle manufacturer in Japan sought to grow its aftermarket parts business in ASEAN by establishing a distribution centre within the region.

The objectives of the study were to:

Assess the feasibility of developing the ASEAN market for specific aftermarket parts, accessories and lubricant oil
Recommend the most suitable location for their ASEAN region distribution centre

The process
Spire conducted an analysis on legal, regulatory and macro-environmental conditions as well as market situation and suppliers of non-original parts and lubricant oil. Supported by the findings from secondary data, the location choices were narrowed down to three.

Interviews with trade associations, relevant government bodies, logistics industry experts and establishments in the non-original parts value chain were carried out in Thailand, Singapore and Indonesia. Our consultants also held internal discussions with our client’s local offices and engaged three logistics service providers to secure proposals for the distribution centres. With the findings, Spire was able to arrive at the final recommendation to our client.

The results
Our client finally decided to locate its distribution centre in Singapore. The centre is currently operational and has been successful in generating cost reductions.

Project deliverables included a report supporting market entry for parts, lube oil and accessories in ASEAN as well as Spire’s recommendation on the most effective logistics service provider.