When BYD became popular in Thailand, other Chinese electric vehicle manufacturers actively entered the Thai market.
On Tuesday, July 4th, the Thailand Board of Investment (BOI) announced that Chinese electric car manufacturer Chery plans to enter the Thai market in early 2024. The company sees Thailand as a strategic investment location for establishing production bases, and Chery plans to introduce the Omoda 5 electric SUV to the Thai market.
In a statement on Tuesday, BOI Secretary General Narit Therdsteerasukdi said that Chery is in discussions with potential partners to consider the appropriate investment model in Thailand. BOI had dialogues with Chery and CHANGAN AUTOMOBILE during an investment roadshow held from June 28th to 30th.
Narit also mentioned that CHANGAN AUTOMOBILE's plan to establish an electric vehicle factory in Thailand is awaiting approval from the Chinese side, with an initial investment of 260 million USD.
Thailand is an important market in the overseas expansion of Chinese car exports. Since the beginning of this year, not only Chery and CHANGAN AUTOMOBILE, but also many other Chinese car manufacturers such as BYD, SAIC, and Hezhong have expanded their investments or established new factories in Thailand to localize car production:
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In March, BYD officially laid the foundation for its production factory in the important automotive production and export base of Rayong Province, Thailand, with production expected to start in 2024. In April, CHANGAN AUTOMOBILE announced an investment of 285 million USD to establish a factory in Thailand for the production of its first right-hand drive vehicle outside of China. On April 30th, SAIC Group announced the construction of a new energy vehicle industrial park in Thailand. In May, a spokesperson for the Thai government stated in a statement that Hezhong has signed an agreement with a Thai car assembly company to start local production of the Nezha V model from next year.
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Analysts from Detroit consulting firm Sino Auto Insights believe that with factors such as the maturity of the domestic market and increased competition, the cost for Chinese car manufacturers to acquire new customers has become very high. In addition, the price war among various car brands at the beginning of the year has led many car manufacturers to see overseas expansion as a more reliable growth path.
<h2>Why do Chinese electric vehicle manufacturers choose Thailand?</h2>
Choosing Thailand is not only because Chinese car brands are well recognized by the local people, but more importantly, Thailand has a mature automotive industry and currently has a demand for electric vehicles.
BYD's success in Thailand is a typical example of Thai people recognizing Chinese electric cars. In October of last year, BYD launched the electric car ATTO 3 for the Thai market, and sales began in November of the same year. As of the end of March 2023, there were 3,000 registered ATTO 3 vehicles in Thailand, accounting for nearly 10% of the total registered pure electric vehicles in Thailand. According to People's Daily Online, when BYD's Rayong Province factory started production, BYD had already delivered over 10,000 ATTO 3 vehicles in Thailand. The scene of consumers queuing to order BYD cars is no longer news in Thailand.
It is worth noting that BYD's ability to gain recognition from Thai consumers is closely related to the company's long-term cultivation in Thailand. As early as 2018, BYD introduced the first batch of pure electric taxis in Thailand, and after years of hard work, its business in Thailand has covered multiple areas such as electric forklifts and electric buses. With the establishment of awareness in the B-side market, BYD passenger vehicles have also entered Thailand.
Thailand is the second largest economy in Southeast Asia. Since 2008, Thailand has set the goal of building an &#34;Eastern Detroit&#34; in the automotive industry. By imposing high tariffs on imported cars and reducing taxes on locally produced cars, it has attracted manufacturers to invest in the industry chain, thus forming a relatively complete industrial chain support. Although most of the world's leading automakers have established production lines here, the automotive industry in Thailand has long been dominated by Japanese automakers, and so far, the production of automobiles in Thailand is still mainly concentrated in the field of fuel vehicles.
In recent years, the Thai automotive industry has begun to make efforts in the electrification reform. In 2021, the Thai government issued policy goals that by 2030, 30% of domestically produced cars will be zero-emission vehicles, and by 2035, the number of zero-emission vehicles will reach 1.35 million.
In addition to electric vehicle manufacturers, the Thai government is also promoting the establishment of battery manufacturers in the country, aiming to become a major production and supply base for electric vehicles and components worldwide. On May 3rd, Thailand stated that it is in talks with Chinese new energy vehicle battery manufacturer CATL and other battery manufacturers.
The establishment of factories by Chinese automakers in Thailand not only serves the local market but also serves as a base to radiate the entire Southeast Asian region. Last year, the region's car sales increased by 23% to reach 3.4 million units.
Some analysts believe that regardless of whether the plans of Chinese automakers in Thailand ultimately succeed, these investments have strengthened China's dominant position in the Asian supply chain. Last year, Thailand received $3.4 billion in foreign direct investment from Chinese companies, more than it received from the United States or Japan.

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Some analysts believe that with factors such as the maturation of the domestic market and intensified competition, the cost of acquiring new customers for Chinese car manufacturers has become very high. In addition, the price war among various car brands at the beginning of the year has also led many car manufacturers to see overseas expansion as a more reliable path to growth. Moving towards Southeast Asia is an important step for Chinese automotive companies to go global.

BYD sold like hotcakes in Thailand, Chery, Changan, SAIC Motor, and Hezhong all want a piece of the action!