Chinese shipyards have taken 56 of the 58 pure car and truck carrier (PCTC) newbuilds ordered worldwide from the start of this year through last month, according to Clarksons Research, extending near-total dominance of a segment revived by China's booming automobile exports.

The order recovery marks a sharp swing from last year's collapse. Global PCTC contracting ran at 83 ships in 2023 and 73 in 2024, before oversupply concerns cut orders to just nine last year. This year, China's export machine has reversed that trajectory: CAAM data show China exported 5,096,000 vehicles in the first half, up 65.3% year on year, with June alone reaching 1,037,000 units — the first month above the one-million mark.

Tight capacity, booming secondhand market

The fleet shortage is now pricing into the secondhand market. In July, a 26-year-old, 4,310 CEU PCTC in China sold for roughly $42 million — triple its minimum bid price of about $14 million. A CEU represents space for one car, putting the vessel in the mid-size class at around 4,300 passenger cars.

Chinese automakers are quantifying the constraint. Executives at BYD told the company's first-half earnings call this month that "overseas exports were hampered by transport constraints this year," adding that "if transport had been smooth, exports would have been higher," according to Reuters and other foreign media.

Shippers are responding with direct newbuild commitments at domestic yards. BYD ordered ten 9,200 CEU PCTCs from a Chinese shipyard this month, Greek maritime outlet Loban Asaphina reported. In July, Hong Kong-registered Zhongnan Shipping ordered four PCTCs from Jiangsu New Yangzi Shipbuilding in Jiangsu province.

European carriers pivot to China

European owners, long accustomed to placing tonnage in Korea and elsewhere, have also redirected volume east. European carriers signed 33 construction contracts with Chinese yards this year. Italy's Grimaldi leads the group, ordering 12 PCTCs across three Chinese builders.

Even owners with two decades of Korean loyalty are switching. China Shipbuilding Trading Company, under China State Shipbuilding Corporation (CSSC), signed a contract for ten 8,200 CEU PCTCs with Israeli owner Ray Car Carriers — an operator that had placed every PCTC order in Korea for the past 20 years. In April, the same company ordered two PCTCs from HD Hyundai Heavy Industries, underscoring how quickly its allocation has shifted.

Price remains the core driver. PCTCs demand no cutting-edge technology, so construction flows to yards with the lowest unit costs. Korean docks saturated with large container ships and LNG carriers compound the effect, leaving Seoul's big three little incentive to chase the segment.

Policy adds a further push. Beijing is supporting ship finance to steer domestic carriers and automakers toward Chinese yards. "For the purpose of using ship finance, many Chinese carriers place orders with domestic shipyards," said Eom Kyung-a, an analyst at Shinyoung Securities.

Commercial consequences

For car exporters — particularly China's EV manufacturers — the capacity gap between vehicle output and available ro-ro tonnage translates directly into lost sales, as BYD's own commentary confirms. For carriers, the $42 million paid for a 26-year-old mid-size vessel signals charter and asset values that reward early fleet additions. For forwarders and logistics providers serving the automotive sector, sustained tonnage scarcity means higher unit transport costs until the 2025-order wave delivers from around 2027.

For Korean shipbuilders, the calculus is deliberate. "Domestic shipbuilders see relatively fewer advantages in winning PCTC orders compared with higher value-added ships such as liquefied natural gas (LNG) carriers and container ships," said Lee Jae-hyeok, an analyst at LS Securities. "Chinese shipbuilders' solo run in the low-price newbuild market will continue for the time being."

With European owners now anchoring 33-ship orderbooks in China, Korean docks committed to LNG and boxship slots, and Beijing's ship-finance incentives still in place, Chinese yards look set to hold their near-monopoly on PCTC contracting into next year's ordering cycle.