Hyundai Glovis, BYD seek strategic alliance on car exports

Hyundai Glovis Co. has inked a memorandum of understanding with China's No. 1 electric vehicle maker BYD Co. to form a strategic alliance on car transportation. The South Korean logistics company is striving to secure foreign automaker clients beyond its affiliates Hyundai Motor Co. and Kia Corp., while BYD is aggressively ramping up overseas shipments.  

Under the MOU, the two companies will explore jointly using their pure car and truck carriers (PCTC), Hyundai Glovis said on Wednesday.

A PCTC is a purpose-built vessel for vehicle transportation. Hyundai Glovis, the world's third-largest car shipping company, operates 81 PCTCs as of 2023 and plans to expand its fleet of the car transport vessels to 102 units by 2026 and 128 units by 2030.

The new PCTCs Hyundai Glovis is set to purchase are ultra-large ships capable of carrying up to 10,000 vehicles at once, which will increase efficiency by about 15% compared to existing car carriers.

In comparison, BYD, China's No. 1 EV maker, recently secured two PCTCs under a long-term lease agreement and placed orders for two additional PCTCs with a Chinese shipbuilder. 

The two companies will discuss collaborating on freight forwarding, leveraging Hyundai Glovis’ global logistics infrastructure and networks across 27 countries. Freight forwarding refers to the entire process of cargo shipment from departure to arrival.

Their preliminary agreement on strategic cooperation came as BYD has been ramping up exports. Its global shipments exceeded 240,000 units in 2023 and are expected to reach 500,000 units in 2024. It is aiming to double exports to 1 million units in 2025.

Hyundai Glovis mainly handles vehicles made by Hyundai Motor Group’s two automaking units -- Hyundai Motor and Kia -- for overseas shipments. It also counts Volkswagen AG and other global carmakers among its clients.

At its annual Investor Day in June, Hyundai Glovis officials said they were striving to secure more automaker clients, including BYD.

They also said the company would expand the proportion of unaffiliated companies in its car shipping revenue to 50% from the current 30% within the next five years.

The global maritime transport market of vehicles is expected to swell to 24 million units by 2030 from 21.11 million units in 2023, driven by Chinese EV shipments, according to Hesnes, a Norwegian shipping industry tracker.

In 2023, China's car exports reached $199.7 billion, the second largest in value worldwide after Germany's $229.7 billion. 

(Updated with details)

Write to Jae-Fu Kim at hu@hankyung.com
 


Yeonhee Kim edited this article.