In Thailand, Chinese car companies have begun to grab Japan's jobs

Based in Thailand and radiating Southeast Asia, Chinese car companies have great prospects

Correct Answer Bureau Listing

Recently, Thailand's June pure electric vehicle market sales ranking has been newly released.

The top three models are all from Chinese brands.

Chinese car companies have begun to grab Japan's jobs.

AutoLife statistics show that 7,637 pure electric vehicles were registered in Thailand in June.

The top three models registered are all from Chinese brands.

Thailand's ranking of electric vehicle registrations in June

Among them, China's Nezha V, BYD Atto 3 and Great Wall Ora Good Cat are in the top three.

In addition, MG (MG), ranked 6th, 7th, 8th and 10th, is also from China.

Volvo, ranked 9th, belongs to the Geely Group and is also from China.

Media reports in February this year showed that the Model 3 and Model Y produced by Tesla's Shanghai Gigafactory in China began to be exported to Thailand.

This means that the 4th and 5th Tesla cars are likely to also come from China.

In this way, the top ten of Thailand's pure electric vehicle registration rankings are more or less related to China.

Let's look at another set of data from AutoLife, in the Thailand electric vehicle sales list from January to June 2023, Chinese cars have cumulatively occupied 80% of the market share.

Thailand's electric vehicle sales list from January to June 2023

BYD Atto3 alone sold 11,167 units, accounting for 35.2% of Thailand's electric vehicle market.

Correspondingly, since the beginning of this year, Thailand has become one of the top seven countries in China's car exports.

According to data from the Passenger Association of China, from January to May this year, Chinese car brands exported a total of 69,129 vehicles to Thailand, a year-on-year increase of 140%, of which 66,321 new energy passenger vehicles, accounting for more than 90%.

Chinese electric vehicles are really popular in Thailand.

The Thai auto market has always been the world of Japanese cars.

Thais are true lovers of Japanese cars.

From trucks and buses, motorcycles and cars, all Japanese cars.

Japanese automakers also see Thailand as one of the most important overseas markets.

Akio Toyoda, chairman of Japan's Toyota Motor Corporation, once bluntly said in public that if it were not for work reasons to stay in Japan, Thailand would be his second home.

According to Focus2Move, about 628,400 new vehicles will be sold in Thailand in 2022.

Thailand New Car Sales Data 2022

Among the top ten brands, Japanese cars account for seven.

Now, Chinese car companies have come to grab jobs.

Admittedly, compared to the total number of new car registrations in Thailand in June, the number of new car registrations in Thailand is only a measly 7,637.

It seems a bit unremarkable.

But you know, this sales is won by Chinese car companies with real knives and guns.

Toyota taxi on the streets of Thailand

In the Thai pure electric vehicle market, Japanese cars are not "sitting still".

For example, Toyota launched the main pure electric vehicle bZ4X.

Nissan

Also took out the "Red Flower Dan" Leaf.

With the reputation of Japanese cars in Thailand, there should be no worry about sales.

Unfortunately, the bZ4X sold only 2 units a month, and the Leaf only sold 6 units.

Japanese electric vehicles lost to Chinese electric vehicles in Thailand.

How did China's electric car emerge in Thailand?

In fact, Chinese car companies use the "playing method" of Japanese companies in Thailand.

There are two reasons why Japanese cars dominate the Thai market:

First, culturally, Thailand is deeply influenced by Japanese culture, and the people have a good impression of Japanese cars.

Second, in terms of industry, Japanese car companies began to establish joint ventures in Thailand as early as the 1960s, set up production lines, and realized localized operations.

One soft and one hard, Japanese cars were able to take root in Thailand.

Chinese car companies have learned from each other, and they have also engaged in two steps: soft and hard.

In terms of software, there are nearly 10 million overseas Chinese in Thailand, and the friendship between China and Thailand has a long history.

The Chinese consortium is even stronger, which has laid a good foundation for Chinese car companies to enter the Thai market.

As early as 2012, SAIC's first factory in Thailand was a joint venture with Thai Chinese consortium CP Group.

In terms of hardware, Chinese car companies have built factories in Thailand.

SAIC, the "first to eat crabs", announced at the end of April this year that it would increase its size and build a new energy industrial park in Thailand, following the commissioning of its second plant in 2017.

SAIC MG rolled off the production line for its 100,000th electric vehicle in Thailand

Great Wall Motor

In 2020, the company acquired General Motors' plant in Thailand and invested THB 22.6 billion (approximately RMB 4.652 billion) to renovate it, and is scheduled to start production in 2024.

Nezha cars

Construction of the plant in Thailand began in March this year and is expected to start operations in January next year.

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Changan Automobile

, BYD,

Chery

and other Chinese car companies, have also announced that they will invest in building factories in Thailand.

Groundbreaking ceremony for BYD's passenger car production base in Thailand

Compared with the export of finished vehicles, the advantages of localization are obvious.

Localized operation can not only be closer to the market, better meet the needs of consumers, but also reduce transportation, tariffs and other costs.

According to Thailand's policy, each locally produced car can not only receive a sales subsidy of up to 150,000 baht (about 31,000 yuan), but also a 4% excise tax exemption.

This allows China's electric vehicles to be equal to traditional fuel vehicles in terms of price and amplify competitiveness.

From the price point of view, Chinese electric vehicles in Thailand, did not blindly rely on low prices to seize the market.

The price of the same product of Chinese car companies in Thailand is more than 50% higher than the domestic price.

For example, the domestic price of NETA V (Nezha V) is 73,900 yuan, and it will be sold for 760,000 baht (equivalent to about 156,400 yuan) in Thailand, a premium of more than 110%.

The Nezha V right-hand drive version was shipped to Thailand

This means that Chinese car companies go overseas to Thailand and have a lot of profit margins.

Chinese car companies also value the broad development space of the Thai auto market.

For the full year of 2022, the total vehicle production in Thailand reached 1.88 million units, an increase of 11.73% year-on-year.

Among them, electric vehicles account for less than 10%, which is still a blue ocean.

Thailand's plan is to produce 1.35 million ZEVs (zero-emission vehicles, mainly pure electric vehicles) by 2030 and 1.35 million ZEV production by 2035.

Chinese car companies have seized the opportunity.

Thailand is heavily supporting the electric vehicle industry and targeting the entire Southeast Asian market.

Thailand is the largest automobile manufacturer in Southeast Asia, with an average annual vehicle production capacity of nearly 2 million units, accounting for half of Southeast Asia.

The era of new energy vehicles has arrived, and Thailand will naturally not miss the opportunity.

Thailand hopes to attract foreign investment, build a complete electric vehicle industry chain, and build the largest electric vehicle manufacturing center in Southeast Asia.

This idea coincides with the overseas strategy of Chinese car companies.

Because of this, we see that in addition to SAIC, Nezha and other vehicle companies entering Thailand, supporting companies are also rubbing their hands.

There are news reports that Thailand is negotiating investment with Chinese power battery manufacturers such as CATL.

Based in Thailand and radiating Southeast Asia, Chinese car companies have great prospects.