The four-year surge in orders for car carriers has drawn to a close, marking a turning point for the market. A large number of new vessels ordered during that period are now entering the delivery phase, ushering in a new wave of completions and raising concerns about potential overcapacity.
According to a recent monthly report from AXSRoRo, a record 75 new car carriers were delivered in 2025, a significant jump from 12 in 2023 and 46 in 2024. Over the past three years, a total of 133 car carriers, with a combined capacity of approximately 990,000 CEU, have entered service. In 2026, deliveries are projected to reach 67 vessels (around 518,000 CEU), which would still be the third-highest annual total on record. Looking ahead, deliveries are expected to taper off to 50 vessels in 2027 and 26 in 2028.
As this delivery wave gains momentum, the order boom that preceded it came to an end last year. Clarkson's data shows that only eight new car carrier orders were placed globally in 2024, the lowest number since just three were ordered in 2020. The recent ordering spree began in 2021, when orders surged to 39 vessels—more than the combined total of the previous five years—with a strong focus on large vessels of 6,000+ CEU. This trend continued through 2024, with annual orders reaching 75, 85, and 73 vessels in 2022, 2023, and 2024, respectively.
AXSRoRo attributes the surge in orders primarily to the rapid growth of Chinese auto exports. In 2020, China's complete vehicle exports just exceeded 1 million units. By early 2021, monthly exports surpassed 100,000 for the first time. This figure climbed to 994,000 units by December 2025, a 21.4% increase month-on-month and a 73.2% increase year-on-year. This explosive growth propelled China past Japan, the long-time leader in global auto exports, to become the world's largest exporter of complete vehicles in 2023.
This shift attracted new players to the car carrier market. Operators not previously deeply involved in Asia-Pacific routes entered the scene, Chinese carriers continued to expand their fleets, and a growing number of automakers began to directly manage their overseas transportation. Companies with no prior history in the sector also began placing orders starting in 2021, including South Korea's H-Line, the world's largest independent container ship owner Seaspan, and Singaporean shipping giant EPS.
Chinese shipyards have solidified their dominant position in car carrier construction. AXSRoRo data indicates that of the 276 car carriers scheduled for delivery between 2023 and 2028, a staggering 219—or 79.4%—are being built by Chinese yards. Japanese shipyards account for 47 of the vessels, representing 17% of the total.
The primary Chinese shipyards involved in building car carriers include Guangzhou Shipbuilding International (GSI), Shanghai Waigaoqiao Shipbuilding (SWS), China Merchants Shipbuilding Industry, Fujian Shipbuilding, and CIMC Raffles. According to Clarksons, among the top ten individual shipyards ranked by car carrier order books, six are Chinese. These are: China Merchants Heavy Industry (Jiangsu) in first place (34 vessels), China Merchants Jinling Shipyard in second (26 vessels), Guangzhou Shipbuilding International (GSI) in third (14 vessels), Mawei Shipbuilding in fourth (11 vessels), Shanghai Waigaoqiao Shipbuilding (SWS) in sixth (8 vessels), and Xiamen Shipbuilding Industry in tenth (4 vessels).
Although Chinese auto exports remain robust and are undoubtedly set to continue growing, the expansion of the car carrier fleet has significantly outpaced market fundamentals. Global car sales have not grown in tandem, suggesting that the rise in Chinese exports largely represents a substitution for exports from other traditional manufacturing regions, rather than a substantial increase in overall demand. This dynamic, coupled with the ordering activities of Chinese automakers themselves, further amplifies the risk of oversupply.
As of now, the order book for car carriers stands at 140 vessels, totaling 1.09 million CEU, which represents approximately 21.66% of the existing fleet capacity. Looking specifically at the 238 new vessels delivered or scheduled for delivery between 2024 and 2027, their combined capacity reaches 1.85 million CEU, close to 45% of the total fleet capacity at the end of 2023.
While a wave of newbuildings floods the market, the number of car carriers being scrapped remains extremely limited. In 2025, only the Grimaldi Group sent two smaller, older vessels for demolition. Additionally, the Morning Midas, owned by Zodiac Maritime, was removed from the fleet following a fire in June 2024. There were no recorded scrapping activities for car carriers in 2024. In fact, higher demolition volumes in this sector have only been observed in periods preceding ordering booms and during the 2020-2021 pandemic. However, both the Grimaldi Group and Höegh Autoliners have announced plans to dispose of older, inefficient vessels, replacing them with newer, larger, and lower-emission ships.
Adding another layer of uncertainty, the car carrier market also faces potential headwinds from US trade policy. In April 2025, the Office of the United States Trade Representative (USTR) announced Section 301 actions targeting Chinese shipping, logistics, and shipbuilding. These actions included a proposed port fee of $46 per net ton on all foreign-built car carriers. Although the USTR suspended these Section 301 port fees for one year in October, their potential future implementation would exacerbate market pressures, compounding the issues of a low scrapping rate and high delivery volumes.
AXSRoRo concludes that the car carrier market is transitioning from a phase of expansion to one of adjustment. With a peak in deliveries coinciding with sluggish demolition, unless the pace of scrapping accelerates significantly, pressure on fleet utilization and earnings appears inevitable. The key themes for the next phase may no longer be growth, but rather absorption and restructuring.
