A continued and steady growth that is driven by Eastern Europe

United European Car Carrier (UECC) is jointly owned by Tokyo-based Nippon Yusen Kabushiki Kaisha (NYK)and Wallenius Lines of Sweden. The company’s main business is moving new cars, commercial vehicles and roll-on, roll-off (roro) cargo on short sea routes throughout Europe.

Norway based UECC has recently expanded its geographical coverage by adding a service to the Black Sea, which commenced in early 2007. In a company release, Craig Jasienski, Director of Commercial Management at UECC said, “UECC is expanding into the Mediterranean and Black Sea countries in order to meet the growing demand for trans-shipment of deep-sea cargo entering Europe and Russia. With the continuing growth in both car production and sales in Eastern Europe, it is strategically important for UECC to be part of this developing market.”

The additional service in the Black Sea will give the company a stronger presence and wider geographical coverage, providing sea-based transport across the whole of Europe, from the Black Sea in the south to the Baltic Sea in the north, says UECC. The new service pattern will connects Piraeus (Greece) – Derince (Turkey) – Ilichevsk (Ukraine) – Piraeus on a weekly rotation. Constantza (Romania) will be included on the return voyage from Ilichevsk to Piraeus on inducement. The new Black Sea service follows UECC’s establishment of a commercial office in Piraeus in August 2006.

The new service reinforces UECC’s position as Europe’s leading provider of short sea transportation services for the vehicle manufacturing industry. The company operates 27 purpose-built vessels, 16 of which are owned by UECC, and has some 850 staff ashore and afloat. UECC also operates several vehicle terminals in major European ports. In 2006 UECC shipped more than 2 million cars and other rolling cargo.

UECC’s new generation of pure car and truck carriers (PCTC vessels) incorporate wide open decks free of internal pillars or obstructions with high levels of lighting. These ships are powered by twin engines for reliability, providing fast service speeds of 20 knots. They are also highly manoeuverable, incorporating twin rudders, bow thrusters and the very latest in high-tech navigation and control systems. Simultaneous loading and discharging operations are possible using a combination of stern and quarter ramps, in conjunction with the flexible design of internal decks. This maximizes productivity and reduces the amount of time the vessels need to spend in port.

With a fleet of 27 PCTCs, the company can also accommodate a large range of RoRo cargoes, including plant machinery (used and new), agricultural machinery, NCC (non-containerized cargoes) on mafi-trailers, abnormal loads, boats and buses. To further satisfy needs in the market, they have invested in warehouses, various cargo equipment, and also operate some 190 mafi/ roll-trailers (40′ and 20′).

Recently, UECC entered into a contract with Ship Equip for the delivery and installation of satellite communication on-board 14 vessels. The transition from the current GSM range communication to satellite communication onboard vessels is expected to lead to a substantial improvement in ship-to-shore communication and consequently, improved operational efficiency afloat and ashore. The satellite communication equipment will be installed during the first half of 2007.

Automotive Industries spoke to Jan Eyvin Wang, managing director of UECC and asked him whether he expected a boom in business.

AI: What has the trend been in the movement of new cars across Europe – has it been growing or has it remained stagnant?

The overall market has grown over the years and we expect this trend to continue into the near future. However, most of the growth, both in production as well as sales, will take place in Eastern European markets, including Turkey. We are seeing a drop in the number of plants in Western Europe, and a displacement of plants to Eastern Europe.

AI: As Europe’s leading shipper of vehicles, do you think that the automotive industry in Europe will see a resurgence and if so, what do you think will fuel the growth?

As stated above we do not expect a resurgence in Western Europe from neither a production nor a sales point of view, but rather a continued and steady growth that is driven by Eastern Europe.

AI: How have former Eastern European Bloc countries emerged as potential markets for automotive products? Please give examples.

In the last few years there has been a strong increase in the sales of new light vehicles in the eastern region of Europe. In 2006 East European sales of light vehicles (cars and light commercial vehicles) were up by double digits on 2005. There are, however, big national differences. The important markets of Russia and Ukraine saw a very positive development in 2006, whereas Hungary, Czech Republic and Poland saw drop in sales of new vehicles in the same year. Having said that, the two latter countries experienced sales of second-hand cars, which far exceeded the sales of new vehicles. This is partly a result of the two countries joining the EU in 2004, and the consequent removal of some of the import restrictions.

AI: Will UECC be increasing the size of its fleet? If so, by how much and why?

We have over the last two years added more tonnage to our fleet through long-term charter of modern vessels. In addition, car and RoRo capacity has been increased on these vessels where technically and financially feasible. This has allowed us to cater to the overall growth in the market as well as to the geographic expansion we are seeing.

AI: In your opinion, which are the European countries that will fuel growth in the automotive industry and what are some of the trends we can expect in the industry in 2007?

In 2007, we only expect sales to grow in two of the big five Pan European markets, namely France and Russia. Having said that, we foresee strong growth in several other East European countries most noticeably, Lithuania, Latvia, Belarus and Uzbekistan.

With respect to production, both Azambuja (GM/Portugal) and Ryton (PSA/UK) have closed down production, while several other West European plants may follow suit. At the same time PSA and Kia opened production facilities in Slovakia last year. Looking into 2007 and beyond, Toyota, GM and VW have announced that they will open plants in Russia, while Hyundai will open up production facilities in the Czech Republic.