Mitsubishi Heavy Industries (MHI) management has decided to shift the focus of its cruise shipbuilding business to smaller cruiseships and roll-on roll-off cruise ferry ships after analyzing a whopping JPY 240.8bn ($2.3bn) in losses building two 124,000-gt cruiseships for Aida Cruises.
A committee at the Japanese shipbuilder set up to study the losses said the Nagasaki yard had overstretched itself in engineering and design terms with the Aida ships and now needs to build passenger ships more in line with its capability. This includes small and medium size cruiseships.
Now the main strategy will be to develop synergies between its Nagasaki cruise shipbuilding business and the its car ferry shipbuilding at its Shimonoseki plant.
MHI said the traditional car ferry, or Ropax, market in which customers typically spend two nights onboard is developing more into what it described as a cruise ferry business requiring entertainment and other facilities aimed at the tourist market.
The Japanese builder said the market trend presented an opportunity to marry the luxury interior outfitting capability it developed at its Nagasaki yard building the Aida ships with the traditional car ferry construction at its Shimonoseki yard to build cruise ferries.
Simon Curtis, senior Partner at Haynes & Boone CDG, said the news did not come as a surprise.
"Shipbuilders globally are struggling to cope with a massive decline in shipbuilding demand and Mitsubishi’s specific problems with its cruiseship newbuilding projects are well documented. Further tie-ups between major shipbuilders can only be seen as inevitable,” Curtis said.
The MHI study confirms speculation last week it planned to reduce its shipbuilding at the same time as compatriot Kawasaki Heavy Industries said it was ready to consider withdrawing from the shipbuilding market because of poor profit from the business.
