Thailand Serves as First Stop for Chinese Car Firms in Southeast Asia

According to data from the China Association of Automobile Manufacturers, in January through August of this year, China exported 1.817 million cars, up 53% year-on-year. Among them, the export volume of new energy vehicles (NEVs) reached 593,000, exceeding the amount delivered in the entire year of 2021 and accounting for 31% overall. The international competitiveness of Chinese NEV enterprises has been continuously strengthened. Moreover, with the increasingly clear momentum of industrial chain transfers to Southeast Asia, Chinese firms are also aiming at this emerging regional market that is home to nearly 700 million people, with Thailand as the first stop.

According to Chinese media outlet LT, there are more than ten Chinese electric vehicle brands that have entered the Thai new energy vehicle market, and SAIC MG, which has a relatively weak presence in China, has won first place. In 2019, it launched its first electric vehicle, the MG ZS, in Thailand, later launching the MG EP. The two models accounted for over 90% of the sales of electric vehicles in Thailand, and their strength can not be underestimated.

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Chinese car companies have deep insight into the needs of local people in Thailand. According to public data, monthly earnings per capita stood at $479 in the country as of December 2020. At this income level, the price, durability and practicability of vehicles are the most important considerations. Take the city of Chiang Mai – one of the more economically developed in Thailand – as an example. Apart from pickup trucks, the most popular passenger models are small cars with a displacement of about 1.5 L, and the most common ones are the Toyota Vios series, and the Honda Jazz and City series.

Based on this, Chinese car companies including SAIC have adopted a low-price strategy to open up the market. Its entry-level family sedan MG 3 is relatively affordable, starting at 479,000 baht ($12,592) in Thailand, and can be owned with a minimum down payment of 15% if paid in installments. Great Wall Motor, which entered the Thai market just last year, also lowered the prices of all three of its pure electric vehicles, with the lowest price of about 830,000 baht – 16% cheaper than the original price. This month, the pre-subsidy price of BYD’s first pure electric passenger car launched in Thailand was only 1,199,900 baht.

They have also adopted the strategy of localized production. SAIC MG (Morris Garages) acquired its first assembly plant in the country as early as 2013, then established a joint venture with Thai Charoen Pokphand Group. This entity spent 10 billion baht to build a second factory with higher intelligence in Chon Buri province. Great Wall Motor immediately launched an intelligent transformation and upgrades initiative after acquiring an automobile factory and powertrain factory in Rayong, Thailand. On September 8, BYD also announced that it would buy land and build a factory in Rayong.

In addition, Chinese car companies continue to invest in R&D. With the technological accumulation of SAIC, MG (Thailand) has developed an i-Smart system that can understand Thai, making MG ZS the world’s first car that supports voice control in Thai. It also has created popular intelligent hardware such as AI assistants based on the highly modular SAIC platform, and has established the image of scientific and technological sense and youthfulness among Thai consumers.

In terms of policies, the Thai government has introduced many subsidy policies for pure electric vehicles and reduced commodity taxes to promote the development of new energy in the country. All these have made Chinese car companies see opportunities for development. Competition in the pure electric vehicle market in Southeast Asia has only just begun.