DHL TAKES OVER THE LOGISTICS MANAGEMENT OF VOLVO CARS’ AFTERMARKET BUSINESS OF SPARE PARTS IN BRAZIL

• DHL Supply Chain takes over the operations of collection and transportation of spare parts for the entire line of vehicles (sedans, SUVs and, in the future, the electric fleet) from Volvo Cars Brazil to 36 dealerships
• The operation stands out not only for including sustainable initiatives, but also for its integration with the national distribution network and management practices of DHL, which include Satisfaction Surveys and a Web Portal that shows information regarding Invoice Issuance and the Lead Times of Delivery to the dealerships

DHL Supply Chain, the global leader in contract logistics, was chosen by Volvo Cars Brazil to take over the logistics management of the aftermarket business of spare parts for the Swedish premium car manufacturer in Brazil. DHL Supply Chain collects the spare parts - the vast majority imported from Europe - and transports them to 36 dealerships across the country. More than 7.5 thousand SKUs and 26 thousand lines are managed annually. Despite the pandemic, the automotive market has been recovering gradually and with an even greater speed in the used car segment - which demands large amounts of spare parts. In September, Volvo Cars reached the 2nd position in the premium car segment in Brazil for the first time, with an 18.1% share. The manufacturer also stands out in the electric vehicle field, being a leader in the plug-in hybrid segment with more than 1,800 vehicles sold in 2020 and a 60% share.

“The automotive market is undergoing major changes with new models of use, the expansion of electrification and vehicles that run for longer periods. These movements boost the demand for spare parts, so that this aftermarket service gains an increasingly important role as a competitive differential of the brand before the consumer. DHL Supply Chain has a consolidated expertise in the aftermarket service for the automotive sector, which enables Volvo Cars to access our high-scale, world-class service standards,” says César Rodríguez González, Operations Director at DHL Supply Chain Brazil.

DHL Supply Chain and Volvo Cars have similar partnerships in Mexico, China, and Europe, which also helped to bring the companies closer together. “We are adopting practices in Brazil, such as satisfaction surveys and an exclusive online platform that enables real time monitoring of the invoice issuance process and delivery lead times at the dealerships - those are rare features in the Brazilian market, which helps a lot in the relationship with these players,” explains the Director at DHL Supply Chain.

“Volvo Cars Brazil has been growing in our country and every day we increase the offer of hybrid products to consumers. We lead by far in the Premium SUVs segment and it is particularly important to have a reliable logistics partner like DHL to take care of our aftermarket business,” adds João Oliveira, Managing Director of Operations and Innovation at Volvo Cars Brazil.

Another differential of this operation is the integration with the national distribution network of DHL Supply Chain in Brazil. Currently, there are more than 2 thousand vehicles, 7 cross docking and 14 branches being operated. Deliveries are made by road - and air, in case of emergency deliveries - and DHL is responsible for planning the routes, handling the cargoes, and transferring the spare parts along the whole route. In Capital cities, the massive trucks of DHL Supply Chain are used for deliveries. To ensure end-to-end visibility of operations, a control tower tracks and monitors each and every step of the process. The logistics operator is also responsible for other aftermarket business in the automotive segment in Brazil, which enables the safe sharing of freight and infrastructure. A recent DHL Supply Chain survey showed that in 22 of the Capital cities in the country, 70% of dealers are located within a radius of up to 4 km. This project also comprises deliveries to the marketing department, such as free gifts and other actions aimed at strengthening the relationship with various stakeholders.

“The collaborative approach in the automotive aftermarket logistics enables many gains, mainly in costs, frequency of delivery and standard of services. As a result, we have also reduced the number of vehicles circulating in urban centers, thereby reducing the emission of greenhouse gases,” says César Rodríguez González.

As can be seen in other initiatives of the Company, this operation incorporates several sustainable aspects. A good example is the tire pressure management and loading optimization systems that ultimately reduce fuel consumption and the total number of freights required to fulfill the deliveries. In addition, the fleet vehicles use the Lower Engine Emissions system, which uses the energy from the braking system to charge an auxiliary electric motor. For the future, the partners also consider implementing a system similar to what is being used in Europe, where DHL Supply Chain employs electric vehicles for deliveries.