In International Shipping News 14/12/2016
Local and foreign shipping firms are seeing a decrease in sales in tandem with a decline in automobile exports due to a slowing global economy.
Hyundai Glovis, Hyundai Motor’s auto-shipping unit, recorded 1.53 trillion won ($1.31 billion) in sales between July and September this year, an 8.2 percent drop on-year and a 1.9 percent decline compared to the previous quarter, company data showed Tuesday.
Eukor Car Carriers Inc, a local shipping firm that handles Hyundai and Kia Motors‘ outbound shipments, also saw a drop in sales, local reports said.
Hyundai and Kia Motors own a 20 percent share in Eukor Car Carriers, while Wallenius Wilhelmsen owns the majority 80 percent share.
Wallenius Wilhelmsen, a joint venture by two shipping companies, Swedish Wallenius Lines and Norwegian Wilh Wilhelmsen, saw a $656 million profit for the third quarter, down 8 percent from the second quarter. In the same time frame, the company‘s operating profit dropped 19 percent to $62 million.
A report by Wallenius Wilhelmsen stated that labor strikes at Hyundai and Kia Motors last August led to a larger than anticipated drop in the shipment volume.
Due to the labor strikes, exports of Hyundai vehicles in August stood at 48,903 units, down 38.3 percent on-year, while Kia’s exports decreased by 23.4 percent to 56,620 units, according to company data.
For the first time in seven years, South Korea’s biggest automaker Hyundai Motors is highly unlikely to surpass the million unit mark for this year’s exports, the Korea Automobile Manufacturers Association said.
Meanwhile, the slide in automobile exports is also attributable to low oil prices, which has dealt a blow to Russia, Brazil and other developing countries, cutting the size of major auto markets by up to 40 percent, industry experts said.
The number of automobiles shipped worldwide for 2016 is expected to total 19.8 million units, down 4 percent on-year, according to global research firm Clarkson Research Services.
“Uncertainty has increased in the market following the election of Donald Trump as US president, so it looks like chances are dim for local factories to recover the exports next year,” said Moon Yong-Kwon, researcher of KTB Investment and Securities.
Source: Yonhap
