Export cars are loaded on a RoRo combined auto and container vessel of Italy’s Grimaldi Group at a terminal in Germany in 2018.
Photo: fabian bimmer/ReutersOcean carriers that haul cars around the world have idled nearly a third of fleets in the sector as operators try to withstand a downturn in automotive demand that has deepened during coronavirus-driven lockdowns.
“We are waiting for the world to restart,” said Emanuele Grimaldi, one of the co-owners of Italy’s Grimaldi Group SpA, a closely held shipping giant that operates one of the world’s biggest fleets of car carriers and heavy equipment movers.
“We had two months of literally zero car production, especially in Europe,” Mr. Grimaldi said. “The production and sales disruption in Europe was bigger than in China.”
The lockdowns aimed at halting the spread of the virus led to a series of factory shutdowns around the world, first in China and then over the past two months in Europe and North America. U.S. car sales fell 28.8% year-over-year in May to 1,128,887 units, according to data provider J.D. Power, which expects full-year sales of between 12.6 million to 14.5 million vehicles, down from a 16.8 million estimate before the pandemic.
IHS Markit, another data provider, expects global vehicle sales to decline 22% this year, to 70.3 million units.
That has companies serving the market slashing capacity to rein back costs.
Norway’s Wallenius Wilhelmsen AS A, one of the largest operators of the chunky, workhorse vessels known as car carriers. last month reported a $285 million net loss in the first quarter after dropping 14 vessels from its fleet. It also furloughed about 2,500 workers in the U.S. and Mexico.
Grimaldi Group is a heavyweight in the international transport of automobiles, trucks, railcars and other vehicles. The company runs 50 ships specially built for vehicle transport for car companies including Fiat Chrysler Automobiles NV, along with Ford Motor Co., Volvo AB and General Motors Co.
Mr. Grimaldi estimates up to a third of the world’s 750-vessel car-carrier fleet was idled last month. He expects a rocky summer as automotive plants start to reopen.
“There is a time lag of about a month or more from production to sales,” he said. “There is pent-up demand, but forecasts that we will be fully back in the fall and car sales will be stronger in October and November than last year are optimistic.”
Grimaldi Group has sidelined up to half of its car carriers and plans to scrap a number of older ships along with returning seven chartered vessels because of the falling demand.
Mr. Grimaldi said the huge stimulus programs launched by governments in Europe and the U.S. will help spur demand that will eventually boost the business of car movers.
But he said he opposes state handouts or loans that he says have distorted competition in the company’s extensive ferry business in Northern Europe and the Mediterranean Sea.
In a letter to the European Union Directorate-General for Competition in April, Mr. Grimaldi accused Finland’s government of providing selective assistance to five ferry operators that compete with his Finnlines PLC subsidiary, one of the largest passenger and cargo ferry players in Northern Europe.
“Financial support specifically to some companies, would constitute state aid and would be extremely selective, discriminatory and capable of distorting competition,” the letter said.
Governments, including those in Scandinavia, Italy, France, Greece, China and South Korea, have poured billions into emergency bailout packages and state-guaranteed loans to ship operators and yards to help them ride out the pandemic.
“Those who are not strong enough to survive should be incorporated by those who are strong,” Mr. Grimaldi said. “That’s the way it should work, but with the pandemic, it’s not. I’ve never seen so much state interference in shipping.”
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Write to Costas Paris at costas.paris@wsj.com
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