In 2007, Chery's acquisition of the poorly run Wuhu shipyard was seen by many as a bad business. In that year, Chery sold 380,000 vehicles, of which 11 were overseas980,000 units, a year-on-year increase of 133%, the momentum is very strong, and according to the plan, in 2010, Chery's annual sales will reach 1 million units, exports will account for 40%, so from the perspective of Chery's top management, this move is not a bad business, but a rainy day. Another practical reason is that China's shipbuilding industry at that time was not developed enough, there was no ocean-going ro-ro ship, and if you want to export to Europe and the United States, domestic car companies must look at the face of Japanese and South Korean shipbuilders, there is no lack of right to speak, and they can not take advantage of the best and timeliness. In 2010, Chery's exports fell into a slump, with exports 40,000 fewer than in 2007, and the contraction in exports rendered the Wuhu shipyard useless, and it was not until 2018 that the first ro-ro ship for inland shipping was built, with only 800 slots. 
Due to the improvement of the competitiveness of domestic cars, the launch of large-scale new energy subsidies in Europe and the United States, as well as geopolitical issues such as the Russian-Ukrainian war, the export of domestic cars is unstoppable, the fastest of which is Chery, from November 202040,000 units skyrocketed to a staggering 93 in 202370,000 units, an eightfold increase in four years. In this context, Wuhu shipyard finally has a place to use, different from the previous small domestic trade ships, this time they want to build three 7,000 parking space LNG dual-fuel car carriers for Chery, according to the 2-3 year construction cycle, these three ships are expected to be put into use as soon as next year. In addition to Chery, SAIC, which exported 1.2 million units last year, and BYD, which has the fastest growth in electric vehicle exports in the past two years, have also spent a lot of money when shipping ** soared, opening their respective shipbuilding roads, and their large ro-ro ships have also been officially put into use at the beginning of this year. 
BYD ordered 8 ro-ro ships in one go, and with these domestic ro-ro ships collectively going to sea, the industry has been shouting slogans for a long time"National wheel, national car, national transport".It has also changed from an ideal to a reality. In the past three years, China's auto exports have jumped from 2 million in 2021 to more than 5.2 million in 2023 (according to the General Administration of Customs), beating Japan to become the world's largest auto exporter, but this also brings a sweet burden: how to deliver these cars to overseas customers safely and instantly? Considering that the main export destinations of domestic cars are South America, Europe, the Middle East and Russia, the cost performance of ro-ro ships is the highest, ** about 20% lower than traditional containers, but the problem is that ro-ro ships are a niche market, with stable capacity, and in the five years before 2021, the average annual compound growth rate of capacity is only 04%, which is basically stagnant. These limited capacity is highly concentrated in the hands of a few shipbuilders such as Japan, South Korea and Europe, and the market share of China's ro-ro fleet was only about 3% until last year, and these foreign shipbuilders are usually deeply bound to their own car companies. Unfortunately, this dilemma has become the norm in 2022. In 2020, the new crown epidemic led to a short suspension of many automobile factories around the world, the global ** chain was blocked, many shipping companies chose to scrap old ships in advance, and the construction cycle of ro-ro ships took 2-3 years, and after 2021, the global auto ** gradually recovered, especially the skyrocketing demand for domestic cars for shipping, resulting in a serious shortage of capacity. A serious mismatch between supply and demand led to a shortage of global ro-ro capacity in the second half of 2022, and rents soared, from $20,000 a year to more than $110,000 per day, the highest level in history since 2008, and on average, the freight rate of a vehicle shipped from China to Israel reached 150,000 yuan, which is not much different from profits. 
In order to solve the problem of capacity bottlenecks, domestic car companies have placed orders with shipyards, such as SAIC Motor, which has placed orders for 14 ships with a total value of 10 billion yuan, and at the same time has also thought about some transitional countermeasures with shipyards to solve urgent needs. For example, converting domestic trade ships into ocean-going ships, packing cars into the holds of pulp and timber ships by building multi-layer iron frames, or simply using traditional containers with more expensive and cumbersome loading and unloading processes, but these alternative solutions often encounter unexpected troubles. ***, a subsidiary of Matrix Partners Ventures, recently wrote,In a port in Spain, due to the lack of ro-ro ships, many Chinese car companies choose to build shelves in containers, but because foreign dock workers are not familiar with this mode of transportation and do not know how to disassemble them, the transportation damage soars and the port is blocked. 
Alternative car transportation methods are also unexpected by many domestic car companies. From the point of view of the route, if a domestic car wants to be successfully transported to overseas customers, it needs to open up the three sections of the first chain, the first section is domestic, the second section is transoceanic shipping, and the last section is the landing of the exporting country. The first section has been relatively mature after more than 20 years of development, and the current large car companies are mainly in the second section, and the most uncontrollable is actually the third section, because many overseas ports have a long history, the overall capacity fluctuates very little, if there is no space to rent as a warehouse, you need to wait for a long time at the port, and it may take up to two or three months. In addition to the lack of manpower in the port site and customs clearance,The export of domestic cars may also face some unexpected "black swans", such as a snail or a dandelion seed. Jingwei's article wrote: As an independent continent, Australia attaches great importance to alien species, and cars may accidentally carry some plant seeds, soil or insects during transportation, and once Australian customs finds these potential threats, imported cars will be required to be deeply cleaned, resulting in an additional cost of hundreds of dollars for a car. In February last year, an Australian ** report said that at least 20 ships and 60,000 new cars were blocked on the east coast for the above reasons, and a ro-ro ship with 3,000 vehicles could be unloaded without working 24 hours a day, but because of the need for deep cleaning, it can only process 9 vehicles per hour, and according to normal working hours, it can only process 350 vehicles in a week, even if it is overtime, it will take at least two weeks to unload the entire ship. 
The Australian port was blocked, and the report also mentioned that in the second half of 2022, due to the discovery of foreign snails on board, the ro-ro ship with 1,000 MG was forced to reload and return to China, and it was not successfully unloaded in Australia until the end of that year, causing a lot of losses to SAIC. The uncertainty caused by strict epidemic prevention requirements makes Chinese car companies and shipowners not only focus on shipbuilding, but also must fully consider the import policies and site resource conditions of the destination country, so as to open up the three links of the entire ** chain. Jin Qi, general manager of SAIC Anji Logistics, said in a recent interview that domestic cars have been stranded in Mexico for up to 65 days, in order to solve the problem of landing at the port, SAIC plans to establish controllable site resources or cooperation space with 20 overseas port yards in the next two years to ensure export efficiency. With the launch of giant ro-ro ships, the previous situation that it is difficult to find a cabin of domestic cars may no longer exist, but does this mean that the more domestic ro-ro ships, the better? From a practical and historical point of view, this is not the case. Over the past four years, the scissors gap in the number of domestic imports and exports of automobiles has become wider and wider. In 2019, the number of domestic imported cars exceeded exports by 60,000, and three years later, in 2022, the number of exported cars in China exceeded that of imports by more than 2.2 million, and in 2023, this number is likely to exceed 4.2 million, and this year is even expected to exceed 5 million. 
Mountains of cars in the harborFor shipowners, this means that they can leave with a full load when they depart, but they may return empty-loaded on the return, and the business risk will be magnified, which is why when the capacity is very tight, car companies will use pulp and timber ships to transport the car, because the loading rate can be guaranteed to the round-trip. According to SAIC's calculations, taking into account the costs of manpower, fuel supply and port berthing on the return trip, at least 30% of the cargo needs to be loaded on the return trip to have a marginal effect, otherwise it is easy to lose money. 
COSCO Shipping uses pulp to ship automobiles Historically, no matter how strong a country is, its exports will not grow indefinitely. Japan, for example, exported more than 6 million vehicles as early as the 80s, but then continued to decline until it was historically surpassed by China last year. Today's domestic cars and Japanese cars in the 80s are quite similar, relying on very cost-effective products to kill all sides, exports have repeatedly hit new highs, but also led to the fire of the ro-ro ship business, but the gun shot the first bird, car companies also have to face the vigilance and even sanctions of European and American countries, such as the United States in the 80s through export quotas to suppress Japanese car companies. The United States of yesterday was what Europe is of today. After the epidemic, China exported cars to Europe on a large scale, especially electric vehicles, and only SAIC's MG and Maxus brands exported 300,000 vehicles to Europe (including the United Kingdom) last year, and in order to slow down the penetration of domestic cars and protect the most important local manufacturing industry, the EU also officially launched a countervailing investigation into Chinese electric vehicles last year. This also forced Chinese car companies not to revel in"Exports have reached a new high", and we must consider how to avoid this policy risk. At the end of last year, Feng Shuling, general manager of Magna Weilan, said in an interview"At present, the overseas mode of domestic cars is mainly based on the export of finished vehiclesThe advantage is that it can enter the market quickly, and there are certain economic advantages in the case of small volumes, but the disadvantage is that additional transportation costs and tariffs need to be increased, and more importantly, it is affected by capacity constraints and potential regional economic protection. ”In this regard, domestic car companies are also touching Japan to cross the river, while realizing it through shipbuilding"Freedom of capacity"On the other hand, it is promoting local production. For example, although BYD ordered 8 giant ro-ro ships in one go, it has also begun to build a vehicle base in Hungary, in addition, SAIC will export 1.5 million vehicles in 2025, but this does not prevent them from actively promoting the site selection and construction plan in Europe. For domestic car companies, the construction of ro-ro ships solves the problem of capacity bottlenecks to a certain extent, but only by building factories overseas can the risk be avoided, otherwise it is easy to open champagne halfway in the narrative of the first export country. References:[1] Take advantage of the momentum: strong certainty in the short and medium term, grasp the opportunity of the car carrier cycle, China Merchants Bank Research Institute[2] Car carrier becomes a "sea money printing machine" There are shipbuilding Chinese enterprise orders scheduled until 2026, ** star[3] "sea money printing machine" is not enough! New troubles for Chinese car companies: "lack of shipping" under the soaring growth of automobile exports, what should I do if the export capacity of the Finance Associated Press [4] is insufficient? COSCO SHIPPING launched a new solution to help domestic automobile exports, China COSCO Shipping e-Magazine[5] "Going Overseas" Economics, Matrix Partners[6] Total Ship Show: Quarantine Crisis Deepens, 60,000 new cars stuck at sea and ports,driveEditor: Luo SongsongVisual Design: Shu RuiEditor in charge: Luo Songsong