BYD and SAIC Motor will have more than a dozen vessels, each of which will be able to carry 7700-8900 vehicles
According to Bloomberg, China’s two largest automakers are keen to establish a stable supply of their cars around the world, for which they decided to buy their own cargo ships.
BYD ordered at least six vessels in October, each with a capacity of 7,700 vehicles, for $710 million. The state company SAIC Motor has announced a tender for seven new vessels, each of which can accommodate 8,900 vehicles.
China recently overtook Germany to become the world’s second largest car exporter, shipping almost 2.6 million vehicles overseas in the first 10 months of 2022, surpassing 2021 volumes. Even the unexpected drop in demand for Chinese goods in October didn’t stop the trend, with car exports up 60% year-over-year to 352,000 units over the period. As a result, the turnover amounted to a record 7.1 billion dollars.
China exported more than 852,000 electric vehicles in the first 10 months of this year, up from almost zero a few years ago. More than a fifth came from Tesla electric vehicles produced at a gigafactory in Shanghai.
The shortage of ships is further stretching the car supply chain. Daily rates for ships that can carry up to 6,500 vehicles have risen to about $100,000 per day as of October, more than ten times the 2020 level and the highest on record (from 2000 to according to Clarksons).
Under such conditions, some ships that are nearly 30 years old are still in service rather than being retired, increasing the risk of accidents.