Chinese automakers and shippers are ordering a record number of car-carrying vessels to support an EV export boom, data revealed. This trend positions China to potentially claim the world’s fourth-largest fleet by 2028.
According to data, Chinese shippers and manufacturers are placing record orders for automobile-carrying vessels. Consequently, this surge aims to accommodate the country’s growing EV exports. This will put China on track to have the fourth-largest fleet in the world by 2028.
According to data from shipping consultancy Veson Nautical, China presently possesses 33 car-carrying ships, making it the eighth-largest fleet in the world. Japan leads the world with 283 ships, followed by Norway with 102, South Korea with 72, and the Isle of Man with 61.
However, Chinese businesses have ordered 47 ships, which makes about 25% of all orders placed worldwide. Buyers on behalf of Chinese automakers include COSCO and China Merchants, as well as SAIC Motor, Chery Automobile, and EV behemoth BYD.
“The Chinese controlled car carrier fleet will jump from current 2.4% to 8.7% after this armada is delivered to China,” Veson analyst Andrea de Luca said. “We expect to see new trade routes established almost exclusively for Chinese OEMs (automakers).”
According to the data, Chinese shipyards have benefited most from the increase in orders, accounting for 82% of all orders worldwide.
Due to intense competition, frugal consumers, and a slowing economy, automakers have increased their entry into areas where their cars fetch greater prices than they do domestically. China surpassed Japan to become the world’s largest vehicle exporter last year.
With ambitions to export up to 400,000 vehicles this year, BYD alone exported over 240,000 cars in 2023. This accounted for roughly 8% of its total sales worldwide.
International competitors like Tesla and Volkswagen have also increased their production in China for export. They aim to benefit from the low-cost supply chain in the nation.
Due to rising transportation costs and local government support, automakers are now purchasing their own ships. According to data from maritime consultancy Clarkson, the daily rate to charter a 6,500-vehicle carrier had increased to $115,000 by the end of 2023. This amount was more than seven times the average for 2019.
However, the increase in exports has led the US and EU to accuse China of attempting to manage excess industrial capacity by oversaturating their markets with cheap goods. This has prompted concerns about fair trade practices and market balance.
The administration claimed that the emphasis on capacity is misplaced. It overemphasizes the role of government assistance in spurring growth while underplaying innovation.
Senior economist Xu Tianchen of the Economist Intelligence Unit states that there is a considerable risk of excess capacity in the shipbuilding industry. China is frequently singled out for criticism in this regard.
Nevertheless, “there remain some niches where the market probably hasn’t saturated, such as car cargo ships,” Xu stated.
During a four-day visit to China, U.S. Treasury Secretary Janet Yellen brought up worries about overcapacity. Wang Wentao, China’s minister of commerce, is currently touring Europe. He is expected to address a European Commission investigation into whether subsidies for electric vehicles built in China are unjustly advantageous.
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