South Korea’s Hyundai Glovis has landed a five-year transport contract valued at $432m from the Volkswagen Group to ferry finished cars from ports in Germany and England to China.
The contract with the German carmaker includes transporting Audi, Volkswagen, Porsche and Bentley-branded vehicles.
A Hyundai Glovis executive said the announcement of the contract became effective early this year and will expire in December 2024, although it was just announced.
Hyundai Glovis did not disclose the volume that it will be transporting for Volkswagen Group but described the contract as “significant for the company”.
The South Korean outfit said the deal will raise the efficiency of the company’s operation globally by adding cargo to routes it often struggles to fill.
According to a car carrier source, the Volkswagen contract is the largest deal that Hyundai Glovis has secured with an automobile manufacturer, outside its South Korea's Hyundai Motor and Kia Motors, since the ship operator entered the sector in 2008.
Hyundai Glovis controls 75 car carriers of which 33 are owned vessels. Analysts at Daishin Securities are expecting the South Korean company to spend around KRW 300bn ($252m) this year on ordering newbuildings.
“We are studying our newbuildings requirements,” a Hyundai Glovis executive said. “We are looking at LNG-fuelled ships but that is a long-term view. No decision has been made.”
Last month, Volkswagen made headlines when it scored an industry first in shipping cars across the Atlantic using an LNG-powered car-carrier — the 7,500-ceu Siem Confucius (built 2020). The Chinese-built ship is owned by Siem Car Carriers and is able to can carry 4,800 vehicles on 13 decks.
