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Rationalisation in the car industry to boost container shipping

London - The rationalization and closure of overseas locations by various auto-makers could boost the car carrier market. Container shipping could take advantage from these closures

London - The rationalization and closure of overseas locations by various auto-makers could boost the car carrier market. Container shipping could take advantage from these closures.

According to research firm Drewry, Honda’s recent decision to cease car production at its Swindon UK plant and supply European car markets from Japanese factories has raised speculation that this may represent a wider industry reshoring trend.

Similarly, Ford announced capacity rationalisations across Europe, Russia, Brazil and China while investing $1 billion in two of its US plants. Were other OEMs to follow suit and seek to fulfil overseas market demand from domestic assembly lines it would signal a boom for finished vehicle shipping. However, while some boost to shipping volumes is anticipated there are other drivers at play.

So what does this mean for seaborne trade demand in finished vehicles? Drewry expects that growing consumer demand for cars and higher production levels in emerging markets will buoy traffic moving on North-South shipping routes and regional trades, while assembly plant rationalisation in mature markets will boost East-West deepsea shipping. And higher volumes of finished vehicles will also drive demand for spare parts shipments moving by containerships. But longer term the shift to electric powered vehicles could moderate trade growth with lengthening product lifecycles and fewer spare parts requirements.

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