China Merchants Energy Shipping (CMES) is eyeing new ro-ro business with Tesla as the electric vehicle maker seeks to export from its Chinese factory.
With weaker-than-expected automobile sales in China, the Elon Musk-led company has reportedly planned to sell its Model 3 cars manufactured in the Shanghai Gigafactory to Asia and Europe.
In a web notice on Wednesday, CMES said: “We are currently actively seeking to participate in Tesla’s tender for shipping cars.
“Our ro-ro unit has adopted a strategy of winning major clients with low costs.”
TradeWinds has approached the Shanghai-listed company for further comment.
Export rebound
CMES, part of state conglomerate China Merchants Group, operates 21 car carriers via its subsidiary China Merchants Guangzhou RoRo Shipping.
The ro-ro unit said on its website that the fleet has an annual transport capacity of over 1m vehicles in domestic and international markets.
But CMES said the company shipped 409,000 cars in the first half of this year, down 18.3% from the same period of 2019.
“The coronavirus hit shipping demand hard in the first quarter. From the second quarter, there has been a strong rebound as car production and sales in China gradually recover,” CMES said in its interim report.
The company has forecast overall strong financial results between January and September, boosted by healthy tanker earnings in the second quarter and bulker in the third.
Strong results
Net profits are expected to reach somewhere between CNY 306m ($45.4m) and CNY 346m in the nine months, compared with CNY 72.3m in the first three quarters of 2019.
“We managed to lock in many revenue days for our tanker fleet in the first half of this year, when rates were strong. Some earnings of this large fleet were recorded in the third quarter,” CMES said in a regulatory filing last week.
“Our dry bulk and ro-ro businesses have shown a strong rebound from the low levels seen in the first half of this year.
“The international bulker market was strong in the third quarter due to health demand for shipping grains and iron ore.”
The company is one of the world’s largest owners in the VLCC and valemax segments.
