A new multi-storey car storage facility at PSA Corporation's Pasir Panjang Wharves will help Singapore maintain its competitiveness as a regional vehicle transhipment hub, according to prominent Norwegian shipowner Wilhelm Wilhelmsen.

He told BT in an interview that despite the 'very good cooperation' his global vehicle carrier group Wilh.

Wilhelmsen gets at PSA, major space constraints here will be one of the major challenges to maintain Singapore's position as a vehicle transhipment hub.

The Wilhelmsen group, founded in 1861, operates more than 150 ships along with its joint venture Wallenius Wilhelmsen Logistics (WWL), which also holds an 80 per cent stake in Korea's Eukor Car Carriers.

As the world's largest vehicle-carrying group, it makes extensive use of Singapore as a vehicle transhipment hub.

PSA handles more than 800,000 vehicles annually at its main Pasir Panjang Wharves and also at the smaller Sembawang Wharves facility.

'PSA has told me they are now going to build the high-rise storage building which is going to help the capacity and that's very important for Singapore to maintain its role as a hub,' said Mr Wilhelmsen, chairman of Wilh. Wilhelmsen.

With the vehicle-carrying industry evolving similar to the container sector which relies on the hub and spoke model utilising large ocean carriers and smaller feeders, there is a growing need for vehicle transhipment hubs, he said.

'The volumes are growing and I can see that Singapore could get even higher volumes given they have enough space and that relates not only to cars but also high-end heavy and non-containerised cargo that we carry on the ro-ros - but all of these require a lot of shore space.'

A PSA corporate spokesman responding to BT queries pointed to the 'excellent relationship' the terminal operator has with WWL, adding they are 'happy WWL sees value in Singapore as a transhipment hub for vehicles'.

But PSA stopped short of confirming when the multi-storey facility would be built, saying only: 'PSA will explore more storage facility if there is demand for such facilities.'

Much of what is feeding this growing car transhipment business is what is known as transplant production in which major car manufacturers outsource all or part of a particular car model's production process.

Now, for instance, you see Toyota cars moving from the United States to Japan, Volkswagons from Mexico to Germany and BMWs from South Africa to Germany.

India and Thailand in particular have also benefited from this trend.

'From 20 years ago when there were three main trunk routes - Asia to Europe, Asia to America and Europe to America - the whole pattern of transportation has changed and is putting much greater demand on carriers to give flexibility of service and that means a greater need for hubs and a greater need for feeders,'Mr Wilhelmsen said.

This has made the business far more complicated and created a need for scale in order to offer the flexibility the manufacturers require, he said.

The other key change is the evolution of the business away from simply delivery vehicles port-to-port, to total supply chain management.

This includes outsourcing parts logistics and value-added services such as fitting location-specific equipment on the vehicle, cleaning, and waxing.

With China becoming a consumer of imported automobiles as well as a nascent car-manufacturing industry catering to both domestic and export markets, this will become a significant market down the road but has little impact in the short-term on WWL's business.

'What we are seeing are growing volumes into China and we see an emerging export industry, but it takes a long time to build a car brand. It's not something that you do overnight - you have to establish dealerships, you have to build the brand, and you have to gain consumer confidence and that all takes time,' according to Mr Wilhelmsen, who is highly regarded in Norway for his social and civic contributions to Norwegian society as well as for his work in the international maritime industry.

In Singapore, his group continues to grow its business with about 200 staff in its Wilhelmsen Maritime Services which includes Barwil Unitor Ship Service, Barber Ship Management, Unitor Marine Systems, Wilhelmsen Premier Marine Fuels and Wilhelmsen Technical & Operational Solutions, as well as WWL and Eukor.