Nov. 10 (Bloomberg) -- Ceva Group Plc, the world’s largest car-parts transporter, said concern that the auto industry is shrinking may be overdone as emerging-market growth spurs orders from clients including General Motors Co. and Volkswagen AG.

Ceva, the biggest global logistics specialist following its disposal by TNT NV in 2006, is tapping booming auto sales in China and Brazil, John Pattullo, the Dutch company’s chief executive officer, said in an interview.

“If you take a global view of automotive it’s not nearly so gloomy,” Pattullo said during a visit to London. “The first quarter was difficult, but it’s got a lot better since then. We’re just at the inflection point now where we will find out whether this will be sustained by ongoing consumption.”

Ceva, sold by TNT to private-equity firm Apollo Management LP, is also benefiting as “cash for clunkers” payments in Europe and North America lift shipments at carmakers such as Fiat SpA of Italy, the company’s biggest auto-industry client. Pattullo said he’s not so optimistic about the wider economy.

“There are a few encouraging signs, but not a fat lot,” Pattullo said on Nov. 6. “I would be fairly pessimistic looking forward in terms of the market. The fact that these markets are still relatively depressed is a relevant economic indicator.”

Ceva, which competes with Deutsche Post AG’s DHL and Kuehne & Nagel International AG in the 300 billion-euro ($449 billion) logistics market, had a 16 percent drop in second-quarter sales as companies shipped fewer goods. Still, the International Monetary Fund is forecasting 2.5 percent growth in world trade next year.

Brazil ‘Buoyant’

Sales are “booming” in China, where Ceva has “a very significant automotive business” with customers including VW, GM and SAIC Motor Corp., the country’s largest domestic carmaker, Pattullo said. Brazil, GM’s third-biggest market after the U.S. and China, is also “very, very buoyant.”

Ceva, whose clients also include Apple Inc., Dell Inc. and Hewlett-Packard Co., sees few signs of a recovery in the global economy, the CEO said, with increases in the price of carrying freight resulting more from shippers slashing capacity than from higher orders.

“There is a bit of an upturn at the moment in both freight rates and activity coming out of Asia and the positive view of that would be Asia showing recovery first, but I don’t subscribe to that,” Pattullo said. “There isn’t much sign of an increase in activity when I talk to our customers and, at this time of year prior to Christmas, you would expect a more buoyant upturn than we’re currently seeing.”

Growth Opportunity

While Ceva’s top 100 customers generate 54 percent of sales, it has only about 5 percent of each company’s total business, so the biggest growth opportunity is to win a greater work share from existing clients, Pattullo said.

To combat the slump in revenue, Hoofddorp, Netherlands- based Ceva is also seeking to shave 100 million euros from costs this year by consolidating distribution centers, reducing travel expenses and freezing hiring.

Ceva was created in 2007 after Apollo combined the former TNT Logistics with EGL Inc., a Houston-based freight transport company bought that year for $1.9 billion. It’s the biggest company engaged only in logistics and overall ranks fourth in the world after DHL, Kuehne & Nagel and Deutsche Bahn AG’s Schenker unit.

Ceva will post earnings before interest, tax, depreciation and amortization of as much as 70 million euros for the third quarter on Nov. 19, it said Oct. 15. Sales will be between 1.3 billion euros and 1.4 billion euros, little changed from the second quarter and 16 percent to 20 percent lower than a year earlier, it said.

The company sold $210 million of bonds in September to help fund investment and doesn’t have any “significant” debt repayments until 2013. At current earnings it also remains comfortably within the limits of its one lending covenant, Pattullo said.

To contact the reporter on this story: Steve Rothwell in London at srothwell@bloomberg.net.

Last Updated: November 10, 2009 03:17 EST