AZE.US
Chinese cars could become more expensive in Azerbaijan as surging exports from China drive up international transportation costs.
Demand for specialized car-carrier vessels has risen sharply, pushing their charter rates up 65% since the beginning of the year. The average daily rate for a large vehicle carrier increased from $42,500 at the end of last year to $70,000 in June.
Despite a roughly 40% expansion of the global car-carrier fleet in recent years, shipping companies are struggling to accommodate the volume of orders coming from China. Many available vessels have already been booked under long-term contracts.
The shortage has prompted some Chinese automakers to transport vehicles to Europe, Australia and Latin America in standard shipping containers. However, this option can also increase logistics costs.
Mobility Global estimates that China could export as many as 10 million vehicles in 2026. By comparison, the country exported fewer than 600,000 passenger cars and light commercial vehicles in 2019.
Andreas Enger, CEO of Norwegian shipping company Höegh Autoliners, said China had transformed from a relatively small player into the world’s largest automobile exporter in just five years.
Azerbaijani economist Natig Jafarli said bizim.medua the increase in transportation costs would also affect the Azerbaijani car market.
“If transportation expenses increase, vehicle prices will rise as well. The impact may be felt first among cars delivered through Iran,” Jafarli said.
According to the economist, the volume of cars shipped to Azerbaijan by sea could decline. Importers may then be forced to use a longer route through the Mediterranean and Black seas before transporting the vehicles through Georgia.
Azerbaijan also has a railway connection with China. However, many Chinese automobile factories are located along the Pacific coast, meaning vehicles must first be transported over considerable distances to reach rail terminals.
Jafarli did not estimate how much retail prices could increase. The final impact will depend on delivery routes, importer costs and whether dealers pass the additional expenses on to buyers.
AZE.US