China vehicle manufacturers will have their own RoRo shipping lines

Buque Roro (Roll on Roll off)
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According to QUARTZ BYD, it has ordered at least six RoRo vessels, ships that can carry thousands of cars at a time. In part, BYD’s move reflects a great deal of frustration from the Chinese auto industry. In the past two years, just as China’s vehicle exports have surged, pandemic-related supply chain entanglements have led to severe shortages of space on cargo ships.

According to a timestamped update (link in Chinese) last month, BYD Auto Industry, a subsidiary of the BYD group confirmed in a paragraph about the scope of its business activities. The section now lists activities not typically associated with an automaker: shipping operations, freight forwarding, international shipping agency services, and port cargo handling. (BYD did not respond to a request for comment from Quartz.)

The Tianyancha update suggests BYD is looking to establish a foothold in global shipping. And it represents another push by the company to establish its dominance throughout the automotive supply chain.

BYD has honed its vertical integration strategy for years, starting as a maker of mobile phone batteries before making other electronics, car components and eventually electric vehicles. That playbook has worked well in the competitive field of electric vehicles.

“[BYD] has mastered the core technologies of the entire industrial chain of new energy vehicles, such as batteries, motors, and electronic controls,” Wang Chuanfu, BYD’s president, once told Forbes.

BYD is already looking to buy lithium mines in Africa and has secured a contract for lithium extraction in Chile, as lithium is an integral part of EV batteries. BYD has become a leading producer of batteries for electric vehicles, including supplying competitors such as Tesla and Toyota, and is expanding its battery production capacity from approximately 285 gigawatt hours (GWh) in 2022 to approximately 445 GWh by the end of this year. year.

“BYD is probably the most vertically integrated [auto] company,” said Lei Xing, a US-based auto analyst and co-host of the China EVs and More podcast. “There is nowhere else to go to vertically integrate other than to [buy] their own ships… And it’s not out of the question that BYD becomes a supplier that you can ship for other people, competitors.”

BYD isn’t the only Chinese automaker getting into the shipping business.

Last July, SAIC Motor, the state-owned automaker, partnered with Chinese shipping giant COSCO and port operator Shanghai International Port Group to set up Guangzhou Yuanhai Car Carrier Transportation, described as a “vehicle supply chain” company ( link in Chinese) .

For China, expanding its homegrown vehicle shipping capacity is seen as critical to increasing the global footprint of its auto industry.

The urgency for reliable shipping has become particularly acute as Chinese auto exports have skyrocketed in the past two years. According to Chinese customs statistics, the value of vehicle exports in the third quarter of 2022 was $12.7 billion, more than five times that of the same period in 2020.

However, over the same period, growth in global car-carrying vessel capacity lagged far behind, according to data from shipping service provider Clarksons, cited by Bloomberg.

Of the roughly 750 auto carriers operating around the world, China currently only operates a fleet of 10 such ships capable of long-distance sea voyages, according to automotive logistics company Changjiu Logistics (Chinese link, pdf).

Source: QUARTZ

Source Quartz

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