German shipyards association calls out “competitive distortions” for causing drops in market share

Flensburger Schiffbau-Gesellschaft's shipyard in Flensburg (Photo: FSG)

The German Shipbuilding and Ocean Industries Association (Verband für Schiffbau und Meerestechnik; VSM) has called out “competitive distortions” as the main causes for the decline in its members’ share of the local and EU shipbuilding markets.

In a statement posted on its website earlier this month, the VSM said that massive subsidisation has allowed growing numbers of overseas shipyards, particularly those in Asia, to secure general-purpose merchant vessel newbuilding contracts that would have otherwise been awarded to German yards.

The VSM said that its members began to notice this trend after the onset of the Covid-19 pandemic. The pause in cruise operations caused by the pandemic led to cruise ship newbuilding orders coming to a halt, and what the association described as a significant demand gap for other vessel types such as Ro-Paxes and large ferries became evident.

VSM President Harald Fassmer has called on the German and EU governments to implement policy changes to address the gap or risk suffering irreversible losses in shipbuilding capability.

Bernard Meyer, CEO of Meyer Werft, meanwhile described the Asian governments’ practices of venturing into European markets as “predatory.”

The VSM added that EU governments need to initiate a “fundamental overhaul” of regulatory framework conditions to create a level playing field in the market.

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