2025 Car Carrier Vessel Market Forecast: Bearish Outlook
The car carrier market for 2025 is looking a bit bearish, with the political landscape shifting due to new tariffs and an increase in supply. Back in June, the European Union announced a rise in import tariffs for Chinese-made electric vehicles, reaching as high as 45.3%. These tariffs came into effect in November and will last for five years. They were increased after an investigation into Chinese state subsidies for domestic car manufacturers. These tariffs have created a bit of unease, which led to a decrease in confidence, causing some turbulence for car carrier operators.
Wallenius Wilhelmsen, a leading owner-operator, saw a hit to its stock price in late October after releasing its Q3 results. The stock fell by nearly 20% in just two weeks. Equity analysts pointed to weaker global car sales forecasts moving forward. While there is some hope for a solid year ahead for the company in 2025, with an adjusted EBITDA growth projection of 7-12% year over year, indicating a softer landing.
Despite this bearish trend, there is hope. Demand for deep-sea roll-on/roll-off (RORO) transportation from China remains strong, suggesting that rates and asset values won’t plummet in the short to medium term. Upcoming deliveries of new car carriers could also provide an unanticipated influx in demand. Manufacturers from China are starting to switch from moving cars in containers to RORO transportation, which could give a boost to the industry.
China plays a crucial role in the global car market, with a massive number of cars being sold each year. However, the increased tariffs by the EU on EVs from China could impact this market. There is also the potential for a rise in supply due to an increase in new orders and the potential resolution of the Red Sea crisis. While it’s unlikely, if there is a significant increase in supply, it could lead to oversupply and affect rates and asset values in the car carrier sector.
In conclusion, the car carrier market for 2025 is forecasted to be volatile due to various economic and political factors. Despite some challenges, there are still pockets of opportunity for growth and stability within the industry.
