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Europe can not meet Chineâ€™s demand for car

17 January 2011 15:23 (UTC +04:00)

Baku - APA-Economics. Europeâ€™s carmakers face rising costs and bottlenecks as surging Chinese demand for their products has left operators of car-carrying ships scrambling to find spare capacity, Financial Times reported.

Car shipment growth/declineOperators of car-carrying ships have had to turn some business away and are reorganising networks as they struggle to cope with demand for European-built cars in China.

The increase in Chinese demand, expected this year to be up to 25 times the 2005 level, has come as most linesâ€™ business shipping Japanese or Korean cars to Europe is stagnant or falling.

That means arrivals of ships in Europe with space to take vehicles back to Asia are falling behind the levels needed.

Svein Steimler, chief operating officer for Europe for Japanâ€™s NYK Line, which runs the worldâ€™s biggest car carrier fleet, told the Financial Times that the phenomenon could eventually restrain how many cars manufacturers can export to China.

â€œPotentially, European car manufacturers could be stuck with too few ships to put their cars in to take them into the biggest car market in the world today, which is China,â€ he said.

Germanyâ€™s Daimler, which is seeing rapid growth in demand for its Mercedes-Benz cars in China, insisted that it was experiencing no problems exporting its cars.

However, Kai Kraass, chief operating officer for Wallenius Wilhelmsen, the largest European-based fleet operator, said that the Chinese surge had for the first time created more demand to shift items from Europe to Asia than the other way round.

â€œThis is a big change for us,â€ he said.

All the operators said growing China demand was a result of the strong desire among newly wealthy Chinese for cars built in Europe, often in preference to the same companiesâ€™ cars built in Chinese factories.

â€œThere are hundreds of millions of people being lifted out of poverty,â€ Mr Steimler said. â€œWhat they want is European-built cars. The market is huge.â€

Carl-Johan Hagman, chief executive of Oslo-based HÃ¶egh Autoliners, said that European seaborne car exports to China had grown to an expected 500,000 this year, from 20,000 in 2005.

â€œWhat has happened with China is absolutely phenomenal,â€ he said.

The changes in the car carrier market mirror changes in container shipping as a result of shifting demand patterns.

Many lines are reorganising to handle growing volumes of trade to and from Africa and South America and moving away from the traditional focus on trade between Asia, Europe and North America.

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