This concept envisages relocating regional production sites closer to the sales markets. Vehicles and components are manufactured where they are sold and used. This minimizes transport routes, improves delivery reliability, and strengthens customer proximity. At the same time, it optimizes the resilience of the supply chain, as regional locations can react more quickly to local market requirements. As one of the most important global automotive suppliers for automation technology, how is Festo dealing with this?
We asked our product specialist Johannes Berwanger for an interview.
How does "Local for Local" work?
At its core, it is about adjusting production in such a way that vehicles and components are directly adapted to the needs of regional markets.
For example, plants for compact and energy-efficient models are being built in Europe, while SUVs that meet local consumer preferences are being manufactured in the USA. Such regional production strategies offer advantages:
- Short delivery times: The proximity to the target markets drastically reduces transportation costs and times.
- Sustainability: Less transportation means lower CO₂ emissions and better use of regional resources.
- Flexibility: Local plants can react more quickly to fluctuations in demand and market trends.
- Customer satisfaction: Customized products promote acceptance and strengthen loyalty.
Another aspect is variant production, in which individual adaptations are made to meet legal requirements or climatic conditions – a key factor in modern automobile production. But how does Festo put this into practice?
"Festo is positioned worldwide in such a way that we offer our customers the same product quality and the same high standard of sales and support everywhere," emphasizes Johannes Berwanger.
"Our national companies ensure that we are able to deliver and supply locally at all times. 'Local for Local' is an essential part of Festo's strategy for the future. It strengthens the security of the supply chain, as has just become clear during the COVID pandemic. At the same time, it helps to circumvent requirements such as punitive tariffs and to respond flexibly to local market needs. Our products, which enable our customers to produce variants, are a decisive advantage. This makes it possible to produce various derivatives in one production run – whether sedan or cabriolet, everything can be realized flexibly and efficiently. This enables our customers to offer customized solutions and optimally serve their markets. While the last few decades have been characterized by globalization, there is now a clear trend towards localization. For us and our customers, 'Local for Local' is not an option, but a necessity in order to remain fit for the future."
Advantages of local production
Relocating to regional production sites has numerous advantages.