Tuesday, 9 December 2014

Carnival and Fincantieri explore building cruise ships in China

American based Carnival Corporation, the world’s largest cruise company, and Fincantieri, an Italian company with the accolade of the world’s largest shipbuilder, have been reported to be considering building cruise ships in China for the Chinese and Asian cruise markets.

A Carnival Cruise Line vessel sailing the ocean

Both companies have recently signed a Memorandum of Understanding to support cruise industry growth in China.

The intention of this Memorandum is to explore opportunities for the two companies to explore the construction of cruise ships especially for the booming Chinese market.

Carnival Corporation had previously signed a Memorandum of Understanding with China's largest shipyard, China State Shipbuilding Corporation (CSSC), in mid-October 2014 to work together on a potential collaborative joint venture focused in shipbuilding in China.

Both of these Memorandums point to Carnival Corporation investigating building cruise ships in Cina for the Chinese market. The American-Italian-Chinese collaboration could see China’s first world-class cruise ships constructed in the country.

It is understood that Carnival Corporation are calling on the expertise of China State Shipbuilding Corporation and Fincantieri for ship-building design and expertise to create the vision, definition and overall specifications. After all, this project is about building a Chinese cruise ship for the booming Chinese cruise market. Whilst China State Shipbuilding Corporation has a reputation for delivering quality industrial vessels Fincantieri’s role is to help adjust their practices and processes to deliver quality passenger cruise ships.

Arnold Donald, CEO of Carnival Corporation is quoted as saying "This new agreement with Fincantieri gives us the opportunity to work with our long-time partner to further explore a formal joint venture that could forever change the landscape of shipbuilding in China".

It doesn’t take much to see why this is a sensible strategic move by Carnival Corporation. The Chinese Ministry of Transport projects China to be the second largest global cruise market after the United States of America in the next several years based on economic growth, increased spending power of Chinese consumers and growing demand for cruise vacations.

By 2020 the Chinese Ministry of Transport projects the country could see 4.5 million cruise passengers and ultimately it could quickly become the world's largest cruise market. Many existing cruise lines will want to be a part of this boom as early as possible.

(Photo credit to Carnival Cruise Line)