Shipping or local production? CO2 impact of a strategic decision: An automotive industry case study

Abstract

For Asian manufacturers the trade-off between shipping from domestic plants and investing in transplant facilities is of particular importance. Korean vehicles indirectly account for significant amounts of greenhouse gases as they travel. Here, an established transport cost model is adapted to track CO2 emissions along the built-up vehicle supply chain from the final assembly plant to a local distribution location, taking the cases of Hyundai and Kia, such that initial estimates of the environmental impact of both the Korea–US and the Korea–Europe automotive supply chains may be made. It is found that in both cases the local option, even using road-based distribution, leads to significantly lower emissions than seaborne sourcing direct from South Korea.