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China Carmakers are Ordering Their Own Ships to Get Export Ready

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China Carmakers are Ordering Their Own Ships to Get Export Ready

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’ve bought their own ships.

BYD Co., 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 Co., 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% 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’s now “lots of investment pouring into building new ships for vehicle transport because of this demand-supply mismatch.”

The lack of vessels is stretching an auto supply chain already worn thin by a scarcity of semiconductors, pandemic-related labor shortages and months of port congestion intensified by China’s Covid-19 lockdowns. Daily rates for vessels that can carry up to 6,500 cars (commonly known as roll-on/roll-off ships, or ro-ros) have surged to about $100,000 a day as of October, more than tenfold 2020 levels and the highest on record since at least 2000, according to Clarksons.

With all the last leg supply chain disruptions it makes sense for Chinese automakers to strike out on their own, according to Tobias Bartz, chairman and chief executive officer of Rhenus Logistics. Ships have become “such a scarcity,” he said on the sidelines of a conference in Singapore last month.

The shortage has meant that some vessels almost 30 years’ old are still operating instead of being scrapped, raising the risk of accidents. Trying to extinguish any lithium-ion battery fires that occur may also be harder.

Chinese automakers aren’t alone in their desire for more freighters. Tesla Inc., which uses Anji Logistics’ car carriers, has also had trouble transporting vehicles from its factories.

“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. “Whether we like it or not, we actually have to smooth out the delivery of cars intra-quarter, because there just aren’t enough transportation objects to move them around.”

This latest pinch point may be new but BYD and SAIC aren’t the first automakers to run their own shipping fleets. Toyota Motor Corp. owns shipping company Toyofuji Shipping Co., while South Korea’s Hyundai Motor Co. has logistics group Hyundai Glovis Co.

It’s also a telling sign of how far Chinese automakers’ export ambitions go.

Just a few years ago, China was mainly selling cars to developing nations in Africa and the Middle East. But the rise in electric-vehicle production has boosted made-in-China cars in Europe, which is now the biggest market for Chinese auto exports. China exported over 852,000 EVs in the first 10 months of this year, up from almost nothing a short while back. Over a fifth of those were Tesla electric cars produced in the US automaker’s Shanghai gigafactory.

To be sure, some aren’t entirely confident that buying ships now is the right decision.

“Car shipping costs are set to come down as the risks shift from backlogs to a glut in the car market,” said Craig Fuller, founder and CEO of supply chain market intelligence provider FreightWaves. With supply chain bottlenecks easing, “the risk is more on the demand side of the equation,” he said.

Until that inflexion point, Chinese automakers appear keen to control as much of the process as they can. Electric vehicle maker Nio Inc. and Chery Automobile Co. are also eying ship orders, local media reported last week.

Among Chinese brands, SAIC is the furthest along overseas. It sold 697,000 vehicles abroad in 2021 — bolstered by the success of MG Motor, the British brand it acquired — and is aiming for 800,000 this year. That’s a way off from meeting its annual shipping capacity, which stands at around 10 million vehicles, but meanwhile SAIC’s ships can and do serve other carmakers too, including Nio.


What Every Business Should Know About Selling in China

Not only is China the most populous country on earth (1.3 billion people), it also has the second-biggest economy in the world by Nominal GDP (14.242 trillion dollars).

As the country has pursued ever more progressive policies to trade (and despite the current trade war between China and the United States) more and more opportunities to sell in the country have arisen to businesses across sectors. If you see China as a potential growth market, here are some of the most important considerations when selling in China.

Seek advice

When looking to enter a foreign market, it is always advisable to seek sage advice, and even look to local businesses who you can partner with. Although you may not wish to go down the partnership route, it is definitely advisable to seek the counsel of businesses who are already operating within the sphere, or groups such as the Global Innovation Forum who often provide free advice regarding penetrating new markets. 

This is a smart strategy because selling in China will be totally unlike selling domestically, or in European markets, for example. Any insights that you can garner will be potentially critical to the success of your sales strategy and approach in China, because as is abundantly clear, you will be operating within a totally different market, both literally and culturally.

“The cultural considerations when accessing new markets should never be overlooked. From the way that you brand and market your products to the way that you negotiate with local businesses and retailers, everything you do will be influenced by different rules: rules to which you are unfamiliar. Get the help you need to pass through this difficult phase,” advises Grant Tarrant, a business writer at and

Understand Chinese governmental practices and rules

Although the Chinese Government has grown increasingly receptive to foreign businesses working and partnering in China, rules will still be a little conservative in comparison to the Western approach. Make sure you totally familiarize yourself with what you are expected to adhere too, especially when visiting the country and seeking to operate a sales operation from within China.

For example, you will need to understand the levels of bureaucracy that exist to set up a business entity that operates within China. For example, you may need to set up as a Wholly Foreign-Owned Enterprise (WFOE) to operate, and this can be a costly and timely exercise that may delay you implementing your sales strategy. Forming a business plan which pays close attention to all the requirements (and timeframes) of the Chinese state is essential.

Understand your customer

This piece of advice holds for whoever you are selling too, but obviously your Chinese customer base will be different from your US customer base and will have different expectations. For example, haggling is a standard cultural procedure, and Chinese customers demand to know a product impeccably before they buy, so ensure that your eCommerce operation includes high numbers of images and product reviews: this will be expected.

“If you study Chinese eCommerce sites such as Taobao you will see that it facilitates the Chinese custom of haggling down prices. In the West we are totally unfamiliar with this practice as we are satisfied that the price is the price, Be prepared to change your approach accordingly,” says Rachel Walliston, a marketer at and

Provide impeccable customer support

Chinese customers have come to expect an extremely high level of customer support from their retailers and will demand this from any new business operating within their sphere. Knowing this, make sure you ramp up support efforts, and that, of course, raises questions regarding how you will do this in a new language and culture. Seeking advice from established entities is again the recommended route, and establishing support centers in the country is also best practice. 

Understand the marketing and communication channels

If you go in with a Facebook-based marketing strategy, be prepared to be disappointed. In China the social media platforms are different, for example, WeChat is one of China’s most popular platforms, but barely exists outside of the country. It has been dubbed a ‘super-app’ because it can be used for a multitude of actions, so utilizing such platforms is an absolute must if you wish to successfully penetrate the Chinese market. 


Ashley Halsey is a writer, editor and international business expert who can be found at both and She has been involved in many projects in Asia, and enjoys traveling, reading and cultural exchanges.