Chinese carmakers are trying to unseat storied legacy brands in Europe. Similarly, half a world away, a revolution is playing out in South-east Asia, in Thailand, where China’s car manufacturers are facing off against Japanese incumbents.
In September, BYD, China’s biggest maker of electric and hybrid cars, announced plans to build its first overseas electric passenger car plant in Rayong, a coastal city south-east of Bangkok.
Days earlier, the 10,000th battery-powered car rolled off Great Wall Motor’s production line in the same town, while Shanghai-based upstart Hozon New Energy Automobile opened its first Thai showroom in the capital’s Central Rama 2 mall.
Chinese carmakers are not just setting up shop and building supply chains. China is also exporting a record number of new-energy vehicles to Thailand, some 59,375 units from January to September, up 176 percent from the same period in 2021, China Passenger Car Association data show.
Thailand now ranks third as an export destination for Chinese electric vehicles (EVs), behind Belgium and Britain.
One reason for the attraction can be found in Thailand’s past and a willingness to leverage that experience as the world goes green. Its status as the largest car-manufacturing hub in South-east Asia and No. 10 in the world has won it the moniker of the Detroit of Asia.
Its comprehensive supply chain feeds scores of factories, mainly owned by Japanese companies, producing internal combustion-engine cars.
In February, Thailand became the first country in the region to offer cash subsidies, up to 150,000 baht (S$5,600), for passenger electric cars. The government is mulling over battery subsidies to further reduce the cost, a move that would add to the some 43 billion baht of tax cuts and incentives for EVs so far.
Battery-powered cars from China are also exempt from most import and excise duties until the end of 2023, though in return, carmakers have to commit to producing locally beginning in 2024.
Thailand has said it wants 30 percent of its total car output to be electric by 2030.
“Our policies show how determined we are to become a global EV production hub,” Narit Therdsteerasukdi, secretary-general of Thailand’s Board of Investment, said.
“That’s boosted confidence and brought in many new players. Of course, most of them are from China. And more will likely follow.”
Indeed, foreign direct investment from China in the first nine months of 2022 has doubled from a year ago, government data show. Much of that investment has flowed into Thailand’s EV sector, Narit said.
“The incentives add up,” mobility analyst Allen Tom Abraham said. “This window from now till around 2024 or 2025 gives Chinese carmakers an opportunity to export their excess vehicle capacity to Thailand and test the market.”
Under Chinese President Xi Jinping’s net-zero commitment and push for self-reliance in deep tech, preferential policies have boosted the production and purchase of cleaner cars, and China’s EV market is now the world’s largest.
A cut-throat domestic landscape has spurred rapid innovations in car design, high-tech offerings and other customer-centric services.
These affordable, popular EV models are now making inroads into markets once dominated by Japanese and Western carmakers.
SOURCE: NEWS AGENCIES