
Car-carrier owners pivot towards China as vehicle export boom continues
Amid China's vehicle export boom, car-carrier owners in the west are prioritising their vessels to transport Chinese new-energy vehicles, and commissioning more newbuildings to target this market.
Wallenius Wilhelmsen CEO Lasse Kristoffersen said, during the company's H1 26 earnings call, the company was focused on the surge in Chinese vehicle exports and saw it as a major source of demand for its car-carrier fleet.
He said: "We were expecting China to export some 10m cars this year, if they got the capacity. We still believe that is the best guess, but in June - and increasing in July - they passed one million car exports per month, meaning that the current run rate indicates more than 12m cars ex-China this year.
"Remember, before Covid China's annual vehicle exports were 1m or fewer."
He continued: "China continues to grow. [Chinese cars] used to be a cheap product. Now it is a preferred product."
And China's boom contrasted with the falling market share of European and US car-makers, added Mr Kristoffersen.
Wallenius Wilhelmsen estimates that, in terms of ro-ro capacity, there is a shortage of 2m-4m ceu.
Mr Kristoffersen said: "What we feared a couple of years ago was that there was a big orderbook going back to 2024. Despite a massive growth in the fleet, all of it has been consumed and there're hardly any vessels available for charter over the next few years.
"We've actively renegotiated some of our contracts to reflect the current market and cost."
Many Chinese customers appear to want longer car-carrier charter contracts and prefer to move vehicles on these vessels, but capacity remains tight. This has stimulated a renewed round of newbuilding orders for pure car and truck carriers (PCTCs).
On Wednesday, UK-based tonnage provider Ray Car Carriers commissioned ten LNG dual-fuelled 8,200 ceu ships from Guangzhou Shipyard International, its first order in China. The Abraham Ungar-controlled company is paying $100m per ship, with delivery between 2029 and 2031. There are, reportedly, options for four more vessels.
And last week, Hoegh Autoliners returned to China Merchants Heavy Industry (Jiangsu) after a four-year hiatus, for six 9,100 ceu PCTCs for delivery between 2029 and 2031.
CEO Andreas Enger said in its H1 earnings call last month Hoegh's PCTCs were 'sold out' for this year, with a strong backlog going into 2027, adding: "Charter rates are climbing and newbuild orderbooks are fully absorbed by the Chinese growth."
He estimated that because of insufficient PCTCs, as many as 1.5m cars have been moved in containers this year so far.
Meanwhile, also commissioning PCTCs last week was SFL, which ordered four at 7,000 ceu for delivery in 2029, two of which have already been chartered by an Asian car-maker for five years, adding $150m to SFL's firm charter backlog.