CHINA EV EXPORT BOOM FUELS DEMAND
CHINESE carmakers and shippers are ordering a record number of carcarrying vessels to support a boom in electric vehicle (EV) exports, data showed, putting the country on course to amassing the world’s fourth-largest fleet by 2028.
China currently has the world’s eighth-largest fleet with 33 car-carrying ships, data from shipping consultancy Veson Nautical showed.
Japan has the world’s largest with 283 ships, followed by Norway (102), South Korea’s (72) and Isle of Man (61).
But Chinese companies have 47 ships on order, accounting for a quarter of all orders globally. Buyers include SAIC Motor, Chery Automobile and EV giant BYD, as well as shippers such as COSCO and China Merchants on behalf of Chinese carmakers.
“After this armada has been delivered to China, the Chinese controlled car carrier fleet will jump from current 2.4 per cent to 8.7 per cent,” said Veson analyst Andrea de Luca. “We expect to see new trade routes established almost exclusively for Chinese carmakers.”
The jump in orders has mostly benefited Chinese shipyards, which received 82 per cent of orders globally,
the data showed.
With price-squeezing competition, cost-conscious consumers and a sluggish economy, carmakers have ramped up expansion into markets where their vehicles command higher prices than at home. Last year, China overtook Japan as the biggest auto exporter.
BYD alone exported over 240,000 cars in 2023, about eight per cent of its global sales, and plans to export up to
400,000 this year.
Foreign peers such as Tesla and Volkswagen have also expanded production in China for export to take advantage of the country’s cost-effective supply chain.
Rising shipping costs and local government support have persuaded carmakers to buy ships themselves. By the end of 2023, the daily rate to charter a 6,500-vehicle carrier reached
US$115,000, more than seven times the 2019 average, showed data from shipping consultancy Clarkson.
But the export rise has prompted the United States and European Union to accuse China of trying to deal with excess industrial capacity by flooding their markets with low-priced products.
The government said the focus on capacity was misguided and that it understated innovation and overstated the role of state support in driving growth.
The risk of excess capacity was also high in shipbuilding, said senior economist Xu Tianchen at the Economist Intelligence Unit, with China the usual target of finger-pointing.
However, “there remain some niches where the market probably hasn’t saturated, such as car cargo ships,” Xu said.