Chinese OEMs invest in Thailand
- Until now, the market and production of automobiles in Southeast Asia has been firmly in the hands of Japanese manufacturers. Thailand's announcements that it will only allow sales of all-electric vehicles (BEVs) from 2035 and offer customers strong incentives in the form of subsidies and tax benefits opens the door for Chinese manufacturers who already have experience in the category and with models attractive to the Asian market.
- Great Wall was the first to respond, planning battery production for its Rayong plant starting in 2023. In turn, the group was able to lower its purchase prices with the subsidies, so the Ora Good Cat now costs only the equivalent of €20.175. BEV production there is expected to grow from 80,000 to 120,000 vehicles annually. SAIC (owner of MG) is planning to invest in a battery factory that will start production in 2023. BYD, currently the largest electric vehicle manufacturer in China, does not yet have local production in Thailand, but is panting for BEV and PHEV production in the Rayong region starting in 2024. Taiwanese electronics manufacturer Foxconn has also announced investments in Thailand to produce BEVs for other corporations. Foxconn has partnered with Thai petroleum company PPT in this effort.
- On the Japanese side, all that is known so far is that Toyota's BEV bZ4x is receiving subsidies. However, there is currently no information on the form and extent of the expansion of local production required for the subsidy. Honda and Nissan produce hybrid vehicles in Thailand, and have not yet made any announcements about switching to BEV production. It remains to be seen whether Chinese manufacturers can seize the opportunity and become the first Southeast Asian country to break Japanese dominance in Thailand.
- Of the European manufacturers, only Daimer/Mecredes in Bangkok and BMW in Rayong are represented with battery production facilities for plug-in hybrid vehicles. It remains to be seen whether they will switch production to receive benefits from the Thai government.
- The fledgling manufacturer VinFast from Vietnam, is unlikely to have the capacity to set up BEV production in Thailand and is more likely to focus on its current search for a BEV production site in Europe. However, it must expect a competitive disadvantage in Thailand, as only manufacturers with local production will receive the subsidies and thus be able to lower prices.
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