China’s Electric Vehicle Boom Challenges Japan’s Dominance in Global Markets

The BYD Atto 3 EV car is displayed at the 39 Thailand International Motor Expo, in Bangkok, Thailand, November 30, 2022. REUTERS/Athit Perawongmetha/File Photo

Thailand Sees Influx of China’s EV Investments, Disrupting Japanese Automakers’ Hold

BANGKOK – With the rapid rise of electric vehicles (EVs) worldwide, China is emerging as a formidable force in the global automotive industry, challenging Japan’s long-held dominance. This shift is particularly evident in Thailand, Southeast Asia’s largest car producer and exporter, where Chinese investments in the EV sector have disrupted the market historically dominated by Japanese automakers. Furthermore, China’s influence extends beyond Thailand, as seen in the recent entry of Chinese EV manufacturer Neta into the Malaysian market, offering an affordable EV option for consumers.

Thailand, a key market for Japanese automakers, is experiencing a transformation as Chinese investments pour in. With over RM6.72 billion invested since 2020 by companies like BYD and Great Wall Motor, Chinese EV manufacturers are reshaping Thailand’s auto industry. The country’s transition serves as a test case for other economies, as Chinese automakers expand their exports and establish production hubs overseas. Japanese automakers, who have been relatively slow in adopting EV technology, now face the challenge of losing market share to Chinese brands in this key Asian market.

Visitors look at a MG Maxus 9 EV car at the 44th Bangkok International Motor Show in Bangkok, Thailand, March 23, 2023. REUTERS/Athit Perawongmetha/File Photo

The Chinese wave in Thailand is compelling local Thai firms, including those with longstanding ties to Japanese companies like Siam Motors, to seek new partnerships with Chinese automakers. Thailand’s attractiveness to Chinese EV manufacturers lies in its existing supply base, built primarily for Japanese automakers, and its willingness to provide incentives such as lower import tariffs and tax breaks for EV manufacturing. The government’s push to convert 30% of Thailand’s annual production to EVs by 2030 aligns with the country’s ambition to become the main regional EV production hub.

While Japanese automakers are feeling the pressure, they are also taking steps to adapt to the changing market dynamics. Toyota, the dominant brand in Thailand, has acknowledged the need for EV production in the country and is considering expanding its product segments. Despite investing nearly RM32.68 billion in Thailand over the past decade, Japanese automakers must broaden their offerings to remain competitive against Chinese brands, which focus on delivering affordable EVs to capture market share.

The compact electric vehicle, made by Chinese carmaker Hozon Auto, is the cheapest EV on sale in the country. — SoyaCincau pic

Neta’s Entry Into Malaysian Market Offers Affordable EV Option

Beyond Thailand, China’s EV industry is making inroads into other markets as well. Neta, a Chinese EV manufacturer, has officially entered the Malaysian market, offering the Neta V as the cheapest EV option at RM99,800. The Neta V’s affordability, coupled with a range of 380 km and a maximum speed of 120 km/h, presents an attractive proposition for Malaysian consumers. The entry of Neta into Malaysia demonstrates China’s ambitions to expand its global EV footprint and cater to markets with purchasing power and growth potential.

Read Also: The Battle for Electric SUV Supremacy: China’s Price War Reshapes the Global Market

Inside the gawky body sits a cabin with minimal buttons, dominated by a huge 14.6-inch portrait touchscreen. — SoyaCincau pic

As China continues to invest in EV production and export, Japanese automakers face the challenge of adapting their strategies to remain competitive in the evolving global automotive landscape. The rise of Chinese EV manufacturers in Thailand and their entry into other markets like Malaysia highlight the growing influence of China in the global automotive industry. The battle for dominance in the EV sector will shape the future of the automotive market, with both China and Japan vying for market share and striving to meet the evolving demands of consumers worldwide. – Reuters