BYD Shipbuilding: Transporting its own cars and making money from its peers

On December 21, Gasgoo learned that Tianyancha showed that BYD Automobile Industry Co., Ltd. had undergone industrial and commercial changes, and its business scope had added international ship management business; non-vessel operating common carrier business; international shipping business Agency; port tally; port cargo loading and unloading activities, etc.

BYD’s move is no accident. Earlier media reports stated that BYD Auto spent 5 billion yuan to order 8 roll-on roll-off ships that can carry 7,700 cars at a shipyard in Yantai, Shandong. Boat. At that time, some analysts believed that the main reason why BYD spent 5 billion to build its own ships was that the rent of ro-ro ships in 2023 had reached as high as 125,000 to 150,000 US dollars a day.

Obviously, as the export of complete vehicles overseas becomes more and more popular, the cost of ship transportation for car companies is also increasing day by day. For car companies that develop chips, batteries, and even purchase minerals from the upstream of the power battery industry chain, building ships themselves may become their next cross-border trend.

　Cost pressure has increased

Chinese cars are rapidly exporting overseas. Data shows that in 2021, China's automobile exports will historically exceed 2 million vehicles. Entering 2022, China's automobile exports in the first nine months increased by 55.5% year-on-year to 2.117 million units, already exceeding the whole of last year.

According to data from the China Association of Automobile Manufacturers, in the first 10 months of 2022, my country's automobile companies exported 2.456 million vehicles, a year-on-year increase of 54.1%; of which, new energy vehicles exported 499,000 units, a year-on-year increase of 96.7% %. This number has surpassed Germany and ranks second in the world after Japan.

Xu Haidong, deputy chief engineer of the China Association of Automobile Manufacturers, predicts that my country’s total automobile exports are expected to exceed 3 million units this year, and the main mode of transportation for complete automobile exports is sea transportation.

Therefore, when the demand for car carriers is increasing day by day, the problem that car companies need to face now is: shortage of shipping capacity, difficulty in reserving seats, and high transportation costs. No less, car companies have to add a new cost pressure.

Relevant industry data shows that from July to October 2022, the one-year rent of a 6,500-space car carrier (ro-ro ship) has increased by US$10,000 per month. Currently, this indicator It has soared to US$100,000 per day, nearly the historical high in 2008Doubled, and there will continue to be a trend of price increases.

It is worth noting that there is currently insufficient capacity and uncertainty in shipping schedules for global car carriers. For example, Japanese car company Nissan said it needs to pay nearly US$150,000 per day for sea transportation of cars; Norwegian car carrier owner Gram Car Carriers said it can earn US$64,900 per day from a five-year forward lease.

For a long time, car companies, as the downstream of the new energy vehicle industry chain, have always been subject to various supply constraints from upstream and midstream manufacturers in the industry chain. In recent years, first, there has been a shortage of automotive chips due to the impact of the international environment; then, car companies have complained that power battery manufacturers are deliberately hoarding to drive up costs; especially at the beginning of this year, the price of lithium carbonate has skyrocketed, which has intensified the cost pressure on car companies. Even if the price of lithium carbonate begins to gradually fall at the end of this year, companies in the power battery industry chain are also looking for new power battery technology routes, but this will still not be able to significantly alleviate the trauma caused by power batteries to car companies in the short term.

In addition, when there is a wave of electrification, intelligence will be the next competition point for new energy vehicles, and car companies will inevitably need to continue to increase their R&D investment in the field of intelligent networking. . What's more, after the end of new energy subsidies, domestic new energy car companies are in urgent need of quickly improving their profitability and making money for themselves, so that they can survive in the future car market.

Nowadays, behind the glorious "sea boom", the problem of scarcity of shipping is gradually emerging. In addition to relying on suppliers, car companies also hope to build ships themselves to reduce the burden on them. Supply chain dependence.

　I want to reduce costs and also want to make money

　What must be admitted is that after all, the "rich and wealthy" car companies are still few.

Previously, people familiar with the matter revealed that Chery Automobile has contacted many parties about ordering a car transport ship and may make an announcement soon. It is worth mentioning that Chery Holdings is also the major shareholder of Wuhu Shipyard.

In addition, some car companies are now cooperating with shipping companies to lock in transportation capacity.

For example, SAIC Anji Logistics, a subsidiary of SAIC Group, and COSCO Shipping Special Transportation Co., Ltd., a subsidiary of COSCO Shipping Group, jointly established Anji COSCO Shipping Special RoRo Transportation Co., Ltd. It is reported that the company has now opened self-operated ro-ro international routes in Southeast Asia, North America and West South America.

Coincidentally, GAC Trading, a subsidiary of GAC Group, also jointly invested in China Merchants Rolling with China Merchants Shipping, a subsidiary of China Merchants Group. Among them, China Merchants Energy Engineering Co., Ltd. holds 70% of its shares and Guangzhou Automobile Trading Co., Ltd. holds 30%.

But compared to the above-mentioned car companies, BYD has penetrated into the shipbuilding field step by step, not just for transporting cars, but also hopes to enter the shipping market one step ahead and broaden BYD's future development. road.

After all, some people in the industry have already said: "We are experiencing the largest bull market in history in the field of car carriers." BYD never wants to miss any opportunities.

Wang Shouwen, international trade negotiator and vice minister of the Ministry of Commerce, once said that China’s own transportation capacity is insufficient for the special ships and ro-ro ships required for maritime automobile transportation. According to statistics, there are about 760 global car transport fleets, and each ship can carry an average of 5,300 cars. Among them, Chinese shipowners’ own car ro-ro fleet has only 51 ships, accounting for a small proportion, and is mainly used for domestic trade. Mainly transportation.

In addition, currently most of the ro-ro ships transporting complete vehicles are operated by foreign companies. An industry insider revealed: "Currently, ro-ro ships are basically manufactured by Japanese, Korean and European companies, and domestic car companies have to book months in advance." "Self-made", car companies that build their own ships will have stronger autonomy. Moreover, according to calculations by Zhou Dequan, chief economist of the Shanghai International Shipping Research Center and director of the Shipping Development Research Institute, BYD shipbuilding is actually a profitable business. It is reported that the cost of a single container ship with 15,000 boxes is around US$120 million (approximately RMB 860 million); a ro-ro ship that can carry 7,800 cars costs approximately US$100 million (approximately RMB 720 million) . From the perspective of market prospects, even if BYD itself cannot achieve such a high export volume, with its fleet, the company can also provide assistance for the export transportation of other car companies and obtain considerable freight rates.

In other words, BYD's shipbuilding is not only for its own vehicle transportation, but also to develop it into a business branch, form a side business, and increase its profit tentacles. After all, BYD is already familiar with making money from its peers.