Two of China’s biggest automakers are so determined to ensure their cars make it from factories on the mainland to anyone who wants to drive them they have bought their own ships.
BYD, which only makes electric and hybrid cars, is going the extra length to avoid any last mile supply chain snarls, ordering at least six ships in October, each with the capacity to carry 7,700 cars, for 5 billion yuan ($710 million).
State-owned SAIC Motor Corp., which already operates the world’s fifth-largest shipping fleet via transport arm SAIC Anji Logistics, has a tender out for seven new carriers that can each hold 8,900 vehicles.
Representatives for SAIC and BYD declined to comment.
With the vessels in question not expected to come online for several years yet, it’s a bold bet on lasting global consumer demand for Chinese cars.
China recently overtook Germany as the world’s second-largest auto exporter, sending almost 2.6 million vehicles abroad in the first 10 months of 2022, eclipsing 2021’s volumes.
Even October’s unexpected drop in demand for Chinese goods didn’t derail that upward trajectory with car and chassis exports growing 60 percent from a year earlier to 352,000 units in the period, or a record high $7.1 billion.
But while auto exports have surged, “the number of car carriers globally has barely increased,” said Xing Yue, the head of Clarksons Research Services in Shanghai, a unit of the world’s largest shipbroker.
Shipping costs have skyrocketed and there is now “lots of investment pouring into building new ships for vehicle transport because of this demand-supply mismatch.”