Wallenius Wilhelmsen (WAWI) investor relations material

Market environment and structural shifts

• The automotive and shipping markets are undergoing unprecedented changes, driven by surging Asian—especially Chinese—exports and declining local production in Europe and the US.

• China’s share of global auto production has risen from 2-3% in 2000 to over 30%, overtaking Japan and Korea and reshaping global trade flows.

• Chinese OEMs have rapidly scaled exports, targeting up to 10 million cars in 2026, with ambitions for further growth and significant market share gains in Europe, Australia, and emerging markets.

• Europe and the US are responding with tariffs, localization policies, and industrial strategies, but face challenges as Chinese cost and technology advantages remain strong.

• The shift to seaborne distribution and lack of return cargoes from Asia has intensified ton-mile demand, straining global shipping capacity and supporting higher rates.

Competitive dynamics and technology

• Chinese brands have evolved from low-cost to technology leaders, dominating digital innovation and offering high-quality vehicles across all segments.

• The rapid adoption of electric and hybrid vehicles in China, supported by industrial policy and vertical integration, has driven down costs and enabled global competitiveness.

• European and American OEMs are responding with restructuring, joint ventures, and increased focus on technology, but face structural disadvantages in cost, speed to market, and supply chain complexity.

• Tariffs and industrial policies in Europe and the US have slowed but not stopped Chinese market share gains; localization and partnerships are increasingly seen as necessary responses.

• The global auto industry is shifting toward more collaboration, with cross-border JVs, tech licensing, and shared platforms becoming common to address capital and innovation demands.

Shipping and fleet developments

• RoRo shipping capacity is constrained, with long lead times for new vessels and limited yard availability through 2030.

• Charter rates and vessel prices are at record highs, reflecting the scarcity of available tonnage and the surge in automotive exports from Asia.

• Operators with large, flexible fleets and global distribution networks have a competitive advantage, as OEMs struggle to secure sufficient shipping capacity.

• New vessel deliveries are being absorbed quickly, and lead times for new builds now stretch to 4-5 years, with most orders placed at a handful of Chinese shipyards.

• The High and Heavy segment, including construction and mining equipment, shows resilience, with growth in mining and construction offsetting weakness in agriculture.