Car carrier rates surge as Chinese automakers push global expansion — a tailwind for Hyundai Glovis

PCTC charter rates top $70,000, up 47% year on year

BYD, Geely overseas push drives surge in China-origin cargo

Supply shortage to persist; H2 operating margin seen above 15%

Hyundai Glovis' 10,800-unit car carrier Glovis Leader. [Hyundai Glovis]

As Chinese automakers accelerate their push into overseas markets, Hyundai Glovis — which operates a fleet of pure car and truck carriers, or PCTCs — is emerging as a clear beneficiary. Surging export volumes have left PCTC capacity relatively tight, driving charter rates sharply higher.

The one-year charter rate for a 6,500-unit PCTC surpassed $70,000 last month, a 47 percent increase from a year earlier, according to the shipping industry. That marks the highest level so far this year and represents a steep climb from the $40,000–$50,000 range seen last year.

The main driver behind rising PCTC rates is the surge in exports from Chinese automakers. With domestic demand weakening due to sluggish consumption and cuts to electric vehicle subsidies, Chinese manufacturers have turned to overseas markets. Rising oil prices tied to the Middle East war have also accelerated demand for electric vehicles — an area where Chinese automakers hold a competitive edge.

The logo of Chinese electric vehicle manufacturer BYD. [AFP]

Chinese auto exports reached about 4.05 million units through May, a 63 percent increase from the same period a year earlier, according to the China Association of Automobile Manufacturers. Among individual automakers, BYD overtook Tesla in the second quarter to claim the top spot in global battery electric vehicle sales. Geely Automobile Group posted overseas sales of 474,228 units in the first half, a jump of 158 percent year on year.

Hyundai Glovis, which holds the No. 1 market share in the China-origin car carrier segment, has been capitalizing on the trend by securing stable revenue from non-affiliate clients. Its non-affiliate revenue share in the PCTC segment has exceeded 50 percent since 2025. China-origin cargo in particular commands higher freight rates than affiliate cargo, giving an additional boost to profitability.

With Chinese automakers continuing their global expansion, Hyundai Glovis is expected to benefit well into the second half. BYD plans to expand its showroom network to more than 2,000 locations across 32 European countries by the end of this year. Geely has begun sales in more than 20 European countries, while its Zeekr and Lynk & Co brands continue to launch new models across Asia, the Middle East and Latin America.

Hyundai Glovis is also expanding its PCTC fleet to keep pace with growing volumes. In April, it deployed the world's largest PCTC, the Glovis Leader, which is equivalent in size to 28 soccer fields and can carry up to 10,800 small cars. The company also plans to grow its PCTC fleet to 128 vessels by 2030, enabling it to transport about 5 million finished vehicles annually — a volume that would account for more than 20 percent of global car carrier traffic.

Ships anchored near Larak Island in the Strait of Hormuz in May. [Getty Images]

Expectations for a second-half earnings recovery are also growing as higher fuel costs — which weighed on margins in the second quarter — are set to be passed through to freight rates from the third quarter onward. West Texas Intermediate crude, which spiked to $111.54 per barrel in early April, has since fallen to around $70 this month, raising hopes for improved profitability.

"Global PCTC newbuild deliveries last year temporarily pushed charter rates lower, but supply remains insufficient relative to the rapid growth in auto export volumes," said Ma Geon-u, an analyst at Kiwoom Securities. "There is a strong likelihood that the PCTC segment's operating margin will exceed 15 percent in the second half."

eyre@heraldcorp.com