Photo: BYD Facebook
Conventional thinking would have it that getting an automobile from an assembly line and onto dealer showrooms would not be that big of a task. However, as the world emerges from the pandemic, that is anything but true, especially go west from Asia.
According to a report in Automotive News Europe, there is a scarcity of car hauling capacity in the shipping industry out there that is causing delivery headaches and driving up shipping costs.
As a result, in October China-based Build Your Dreams or BYD as it is more commonly known, took matters into its own hands by ordering a small fleet of ships (6) to take their electric vehicles that last mile to dealer floors to the tune of $710 million (675.7 million euro) Each ship reportedly has the capacity to carry 7,700 vehicles.
Following suit, China State-owned SAIC Motor Corp. is adding seven new carriers capable of transporting 8,900 vehicles each. The company already operates the fifth largest shipping fleet in the world through its SAIC Anji Logistics subsidiary.
Neither order would seem to be a solution in the short term as the ships would not be built and operational for several years to come.
Exports of Chinese-branded cars are on the rise with 2.6 million vehicles shipped abroad in the first ten months of 2022, surpassing Germany as the world's second-largest auto exporter.
Because of the lack of capacity, daily shipping rates for ships carrying 6,500 vehicles have increased more than ten-fold from 2020 levels, to $100,000 per day.
Tesla is in the same boat, so to speak. "There weren't enough boats, there weren't enough trains, there weren't enough car carriers to actually support the wave" of vehicle deliveries at the end of the last quarter, CEO Elon Musk said during Tesla's third-quarter earnings call.
It is not unheard of for overseas automotive manufacturers to get into the shipping business. Both Toyota and Hyundai own shipping companies, but it remains to been seen whether an impending global recession will cause new car demand to plunge and create a glut of unsold vehicles.
As a result, in October China-based Build Your Dreams or BYD as it is more commonly known, took matters into its own hands by ordering a small fleet of ships (6) to take their electric vehicles that last mile to dealer floors to the tune of $710 million (675.7 million euro) Each ship reportedly has the capacity to carry 7,700 vehicles.
Following suit, China State-owned SAIC Motor Corp. is adding seven new carriers capable of transporting 8,900 vehicles each. The company already operates the fifth largest shipping fleet in the world through its SAIC Anji Logistics subsidiary.
Neither order would seem to be a solution in the short term as the ships would not be built and operational for several years to come.
Exports of Chinese-branded cars are on the rise with 2.6 million vehicles shipped abroad in the first ten months of 2022, surpassing Germany as the world's second-largest auto exporter.
Because of the lack of capacity, daily shipping rates for ships carrying 6,500 vehicles have increased more than ten-fold from 2020 levels, to $100,000 per day.
Tesla is in the same boat, so to speak. "There weren't enough boats, there weren't enough trains, there weren't enough car carriers to actually support the wave" of vehicle deliveries at the end of the last quarter, CEO Elon Musk said during Tesla's third-quarter earnings call.
It is not unheard of for overseas automotive manufacturers to get into the shipping business. Both Toyota and Hyundai own shipping companies, but it remains to been seen whether an impending global recession will cause new car demand to plunge and create a glut of unsold vehicles.
China carmakers order their own ships to get export ready https://t.co/Tupkm5WotF pic.twitter.com/DwJovV8mad
— AutoNews Europe (@AutoNewsEurope) December 5, 2022
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