Not long ago, the electric car brand Euler Haomao under the Chinese car company Great Wall Motors (601633) officially rolled off the assembly line at the new energy vehicle manufacturing base in Rayong, Thailand. This is the first mass-produced pure electric model produced locally in the history of the Thai automobile industry. . In recent years, Chinese electric vehicles have set off an investment boom in Thailand. Industry insiders point out that Chinese car companies must pay attention to product quality and services when going overseas, and actively integrate into the local industrial ecology.
Step up the layout of the Thai market
At the 40th Thailand International Auto Expo held in Bangkok, Thailand, in December 2023, Chinese car companies stood out in terms of sales, with five Chinese electric vehicles among the top ten brands in terms of sales. According to data provided by the organizer of the auto show, BYD (002594) received 5,455 orders, ranking third in the auto show sales list after Japanese cars Honda and Toyota. At the same time, Chinese car companies such as GAC Eon, SAIC MG, Changan, and Great Wall Also entered the top ten list.
It can be seen from the Thailand Auto Show that Chinese car companies are using new energy vehicles to achieve lane changes and overtaking. It is worth mentioning that in 2023, BYD will sell 30,650 vehicles in Thailand, with a market share of about 40%, ranking first among Thai electric vehicle brands.
The earliest Chinese car companies going overseas to Thailand can be traced back to SAIC Motor (600104). In 2012, SAIC formed a joint venture with Thailand's Charoen Pokphand Group to produce and sell MG brand cars in Thailand. Great Wall Motors also entered Thailand relatively early. In 2020, Great Wall Motors acquired General Motors' manufacturing plant in Rayong, Thailand, invested 22.6 billion baht (approximately RMB 4.72 billion) in reconstruction, and officially put it into production in June 2021.
Since 2022, Chinese electric vehicles have set off an investment boom in Thailand. In September 2022, BYD Auto signed a contract with WHA Weihua Group Volkswagen Co., Ltd. and formally signed an agreement related to land subscription and factory construction. In March 2023, BYD officially laid the foundation for its Rayong factory in Thailand. This is the first overseas passenger car factory wholly invested by BYD. It is expected to start production in 2024, with an annual production capacity of approximately 150,000 vehicles. In November 2023, Changan Automobile's (000625) Thailand production base officially laid the foundation, including production upgrades such as painting, final assembly, engine assembly, battery assembly, and important spare parts. The first phase is designed to have an annual production capacity of 100,000 vehicles, and is planned to be put into production in 2025.
Cheng Jinkui, President of Great Wall Motors' ASEAN Region, introduced that since the launch of Great Wall Motors' first new energy vehicle Haval H6 HEV in July 2021, Great Wall Motors has successively introduced 9 new energy models such as Haval, Euler, and Tank into the Thai market. It has delivered more than 30,000 vehicles and operates nearly 70 dealer stores, covering Greater Bangkok and 81% of the foreign market.
Chinese car companies that came to invest in Thailand also brought supporting industries such as batteries, driving Thailand to establish an electric vehicle industry chain. In December 2023, the first battery product of the Thailand factory of Guoxuan Hi-Tech (002074), a joint venture between China Dynamics (600482) battery company Guoxuan Hi-Tech (002074) and the Thai side, was officially rolled off the production line in Siam Oriental Industrial Park, Rayong Province, Thailand.
In order to better support the international development of China's automobile industry, the Southeast Asia representative office of China Automotive Technology and Research Center Co., Ltd. (hereinafter referred to as "CATARC") will also be officially put into operation in Bangkok, Thailand, in November 2023. This marks the future of CATARC. We will focus on strengthening our strategic layout in the ASEAN region and further promote the high-quality development of the automotive industry in China and ASEAN.
Favorable factors continue to accumulate
Industry insiders pointed out that Chinese car companies have entered the Thai market one after another, mainly due to three important factors: local electric vehicle support policies, historical accumulation of industrial factors, and geographical layout.
--The Thai government has launched a series of policies to support the development of electric vehicles. According to the "3030 Policy" introduced by the Thai government two years ago, the sales of electric vehicles will reach 225,000 units in 2025 and 725,000 units in 2030, accounting for 30% of its automobile production. It will eventually achieve 100% electric vehicles in 2035. goals. The Thai government also aims to realize its vision of becoming a regional and global electric vehicle production center by promoting the transformation of automobiles into the electric field. To this end, the Thai government has implemented electric vehicle subsidy plans and tax incentives. At present, Thailand has reduced the consumption tax rate for pure electric vehicles from 8% to 2%, and provides 70,000 to 150,000 baht for different types and models of electric vehicles. At the same time, we will reduce or exempt road taxes and import duties on electric vehicles, and accelerate the popularization and promotion of electric vehicles.
--Thailand has a relatively complete automobile industry chain. In the 1960s, Toyota had established a vehicle factory in Thailand, and Honda, Isuzu, Nissan and other car companies also entered Thailand one after another. With continued investment in building factories and increasing production capacity, Japanese brands have gradually taken a dominant position in the local market and established related supporting industries. Currently, Thailand produces more than 2 million vehicles per year and has nearly 700 first-tier auto parts suppliers.
Shen Xinghua, general manager of Changan Automobile's Southeast Asia Business Department, said that after a comprehensive comparison of Southeast Asian countries, he finally chose to build a factory in Thailand, mainly focusing on factors such as Thailand's supportive policies and mature automobile industry chain, which will help the entire industry chain operate overseas.
--Thailand has obvious location advantages. In addition to its strong radiating and driving effect on Southeast Asia, the Thai market can also drive global markets such as Australia, New Zealand, the United Kingdom, and South Africa. With Thailand as its base, it will be able to serve the entire ASEAN region and even the global right-hand drive market.
Zhang Zhen, head of the ASEAN regional brand of Great Wall Motors, said that Thailand is located on the main global shipping route, and automobile exports can reach various foreign markets through efficient and convenient sea transportation. The cars produced by Great Wall's Thailand factory have served the entire ASEAN market. In the future, the factory will also become Great Wall's global passenger car manufacturing base. It has currently tried to export cars to South Africa, Mauritius and other countries.
Take multiple measures to maintain advantages
Shen Xinghua said that although Chinese car companies currently occupy most of the new energy vehicle market share in Thailand, as Japanese, Korean, European and American car companies develop new energy models in Thailand, Chinese car companies will still have to make huge efforts to gain a foothold. Determination and hard work.
Shen Xinghua said that the current trend of Chinese car companies investing in Thailand is reminiscent of the expansion of Chinese motorcycle companies into the Southeast Asian market in the 1990s. When Chinese brand motorcycles entered the Vietnamese market, they quickly occupied the market with their appearance similar to Japanese motorcycles and lower prices, and their share once reached 80%. But then, Chinese motorcycle companies started a price war in order to seize the market. The companies tried their best to reduce costs, resulting in poor product quality and frequent failures. They eventually lost the local market. Not only did they lose the market to Japanese motorcycles, but they also lost control of the local market. It left the impression of "low price and poor quality" on local consumers.
Shen Xinghua pointed out that it is necessary to learn from the experience and lessons of Chinese brand motorcycles going overseas to avoid quality decline due to price wars and cost reduction, which will affect market reputation.
According to industry insiders, it is not easy for Chinese car companies to further break through the "defense line" established by Japanese brands in Thailand for a long time. Japanese brand cars occupy a major share of Thailand's fuel vehicle market. Japanese car companies have higher pricing, earlier layout, and localization rate of parts production than Chinese car companies. They also have greater room for price reductions after generating economies of scale. Therefore, Chinese brand cars must continue to carry out technological upgrading and product innovation.
In addition, with the development of the market, the Thai government's support policies for the electric vehicle industry are also showing signs of recovery. The Thai Cabinet approved the electric vehicle support policy EV3.5 from 2024 to 2027 on December 19, 2023. Compared with the current EV3.0, the purchase subsidy for electric vehicles has been reduced from the maximum 150,000 baht to 100,000 baht.
Moreover, the Thai government is also looking for investment from other countries. Thai Prime Minister Saitha Thakur has been vigorously recruiting local car companies during his recent visits to the United States and Japan. During his visit to Japan in December 2023, Saita said that Thailand will continue to support Japanese companies in producing traditional fuel vehicles in Thailand, while formulating investment incentives for Japanese automakers to expand electric vehicle production in Thailand. The Thai government plans to hold talks with major Japanese companies on possible tax incentives if they are willing to produce electric vehicles in Thailand.
Shen Xinghua said that in terms of new energy vehicle development, Chinese automobile brands are currently in a leading position in technology, but they need to continue to invest to maintain technological leadership. At the same time, at the level of brand communication, traditional brands occupy the core position of traditional channels, so it is necessary to break through the circle through new marketing methods and content to achieve new brand building.
In Zhang Zhen's view, new energy and intelligence are the two major advantages of Chinese brand car companies. In the past two years, the overseas export of Chinese brand cars has changed from exporting products overseas to exporting brands and technologies overseas. This is a major trend. "We must pay attention to product quality and service, maintain the brand image, and truly enter the hearts of local consumers. Local thinking is very important, and we must actively integrate into the local socio-economic formation and industrial ecology."
