China's BYD is stealing a march on Japanese car makers in Thailand's fast-growing EV market. Image: Twitter
Chinese electric vehicle champion BYD is expanding its reach in Thailand, testing Japan’s long dominance of the local auto market as the two car-making giants increasingly compete head-to-head for developing Asian markets.
BYD only recently entered the Thai auto market – in July 2022 – but already accounts for about 4% of total new vehicle sales and more than a third of electric vehicle sales, according to Autolife Thailand.
Toyota, Isuzu and Honda remain the top three brands in Thailand, but BYD tops the list of EV makers, i.e. the wave of the automotive future. In terms of total vehicles sold in Thailand, BYD has surpassed four smaller Japanese competitors, namely Nissan, Mitsubishi Motors, Mazda and Suzuki.
BYD’s rise in Thailand is a product in part of aggressive marketing and pricing. Exclusive dealership rights have been granted to Rever Automotive, which has strong family connections with Thai auto industry powerhouse Siam Motors.
Rever provides an extensive service package and is reportedly persuading dealers of less popular Japanese brands such as Suzuki and Mazda to switch to BYD.
Model comparisons are not straightforward but the BYD ATTO 3 is reported to be selling for US$30,000 to $33,000 in Thailand, compared with $43,000 or more for the Nissan Leaf, $50,000 for the Toyota bZ4X and around $47,500 for Tesla’s Model 3.
Rever is selling the BYD Seal for about $36,000 and the smaller BYD Dolphin for just under $20,000. The ATTO 3 has recently been the best-selling EV in Thailand.
National energy policy is an important factor. By 2030, the Thai government wants 30% of vehicles made in the country to be electric. The Chinese are jumping at that opportunity; so far, the Japanese are not.
Supported by subsidies, the percentage of EVs in total Thai auto sales has risen from about 1% in 2022 to more than 10% now.
In early October, Prime Minister Srettha Thavisin went for a drive in a BYD Seal as part of a campaign to support Thailand’s “green future.” Japan’s Nikkei newspaper wrote that “it was symbolic that the car was a Chinese-made EV, not a Japanese one,” but Japanese EVs barely register in Thai auto market statistics.
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Earlier this year, data from Thailand’s Department of Land Transportation showed BYD’s battery-powered EVs (BEVs) were outselling Nissan’s by more than 50-to-1.
BYD ranked first in BEV registrations, Nissan ranked 10th and the companies in between were SAIC (MG), Great Wall Motors, Hozon and Geely (Volvo), Tesla and – toward the bottom of the list – BMW (including Mini) and Porsche.
Last March, BYD started building a factory in Thailand to produce EVs for sale in Thailand and export to other ASEAN countries and to Europe.
Situated in Thailand’s Eastern Economic Corridor, it will have a capacity of 150,000 vehicles per year, or about 10 times the number of vehicles the company sold in Thailand in the first eight months of this year. Production is scheduled to begin in 2024.
The groundbreaking ceremony for BYD’s factory in Thailand. Image: Twitter
China’s SAIC and Great Wall Motors already have assembly plants in Thailand. GAC Aion, Hozon Auto and Changan plan to join them starting next year.
The wave of Chinese investment will help Thailand maintain its position as the auto-producing hub of Southeast Asia – once referred to as the “Detroit of Asia” – and give Japan a wake-up call not only in Thailand but also in Indonesia, Malaysia and elsewhere in the region.
After working for decades to build market shares as high as 90% with internal combustion engine vehicles in Southeast Asian countries, the Japanese have nowhere to go but down without a fast and hard shift to EVs.
Data from the Japan Automobile Manufacturing Association (JAMA) shows that passenger cars, trucks and buses made by its members accounted for 80% of the 2.8 million vehicles sold in ASEAN in 2021. With Hyundai Motor also expanding in Southeast Asia, more recent reports indicate that Japan’s share of the market has since declined to about 75%.
The Japanese have a huge Southeast Asia production base to defend. JAMA calculates that in 2021 just over three million vehicles were made at more than 50 Japanese factories across ASEAN.
Of these, 48% were made in Thailand, 35% in Indonesia, 11% in Malaysia and most of the rest in Vietnam and the Philippines. In 2021, more than a third of the vehicles made in Thailand were exported.
All these countries have a strong interest in maintaining the employment and supply chain infrastructure supported by the Japanese auto industry. The question now is, will the Japanese respond quickly enough to not lose another large chunk of the market?
Suzuki in India
The situation is very different in India, where Japan’s Suzuki Motor plans to turn its subsidiary, Maruti Suzuki, into its global EV production base.
Factors supporting this decision include the huge potential of the Indian market, Maruti Suzuki’s dominant market share in the country and an estimated 20% lower cost of production than in Japan.
According to India’s Federation of Automobile Dealers Associations, Maruti Suzuki had just over 40% of the Indian market for passenger cars in 2022 in terms of units sold.
It was followed by Hyundai Motor at 15%, Tata Motors at 14%, Mahindra & Mahindra at 9%, Kia Motors at 7%, Toyota Kirloskar at 5% and Honda at 2%.
India is now the third-largest auto market worldwide after China and the US. According to Japan’s Kyodo news, in the year to March 2023, new four-wheeled vehicle sales in India were up 28% to 4.85 million units, exceeding the 4.39 million units sold in Japan, which dropped into fourth place.
Workers fit out Maruti Suzuki Swift cars on an assembly line in Manesar in Haryana state. Photo: Asia Times Files / AFP
The Indian market for EVs, like that in Thailand, is just taking off. In the six months to June 2023, about 15,000 four-wheeled electric vehicles were sold – less than 1% of India’s overall auto market but up six times year-on-year. As in Thailand, the government of India wants EVs to account for 30% of new car sales by 2030.
There are more than 2.7 million EVs on India’s roads but almost all of them are two- and three-wheelers: motorcycles, scooters and rickshaws. The largest sellers of four-wheeled EVs in India in the first half of 2023 were Tata Motors, Mahindra & Mahindra and SAIC (MG). Hyundai, Kia, BMW, Citroen and BYD also sold a few vehicles.
Maruti Suzuki plans to start production of EVs in the second half of 2024 with exports to Japan likely to commence in 2025. Exports to Europe are expected to follow, perhaps through a tie-up with Toyota.
This is part of Maruti Suzuki’s recently announced plan to expand production capacity from 2.25 million to 4.0 million vehicles per year by 2031, of which 60% will be battery EVs, 25% hybrids and 15% powered by alternate fuels including compressed natural gas, biogas and gasoline-ethanol blend flex fuel.
About 1.0 million of the 4.0 million vehicles will be made at a new factory in Kharkhoda. An exporter for more than 30 years, Maruti Suzuki now ships gasoline-powered cars to some 100 countries in Asia, the Middle East, Europe, Latin America and Africa.
The company’s exports to Africa were up about 60% last year to about 116,000 units or more than 40% of the total. EVs are likely to follow, giving the Chinese a run for their money.
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