Korean shipyards, which swept nearly 40 percent of global orders last year, will cooperate to tap into the lucrative cruise market in a bid to stave off the rising threat from China. Chief executives of five Korean shipbuilders, including the world's No. 1 Hyundai Heavy Industries, agreed to initiate a 40 billion won research project on cruise ships, jointly with the Ministry of Commerce, Energy and Industry. They will map out a five-year plan to help the shipbuilders maintain their global dominance.
The shipyards agreed that with China rapidly increasing its capability to build low-end vessels such as bulk ships, it seems like there's no other option for Korean shipyards but to switch to the high-end markets for luxury cruise ships and marine plant facilities. The Korea Shipbuilders' Association said in a recent report that Korean shipbuilders need to focus on the cruise ship market worth over 10 trillion won. Global demand for the luxury ships is expected to grow 5 percent annually.
Korean shipyards have been focusing on producing carriers of bulk and liquefied petroleum gas and do not have a strong foothold in the cruise ship business, which accounts for about 20 percent of the global shipbuilding market. The cruise ship market is currently dominated by European shipyards.