Korean Media: Chinese Electric Vehicles Are "Creating a Storm" in the Southeast Asian Market!

On October 31, the Korean media outlet Seoul Economic Daily published an article stating that Chinese electric vehicle companies are creating a storm in the Southeast Asian market. With the evaluation of "high cost-performance ratio" and the sharp increase in sales of Chinese electric vehicles, the position of Japanese car companies that have dominated the Southeast Asian market for decades is beginning to waver.

In the first half of this year, the market share of Japanese brands in the six major Southeast Asian markets (Indonesia, Malaysia, Thailand, the Philippines, Vietnam, and Singapore) was 62%. This figure has dropped significantly compared to the average market share of 77% in the 2010s.

While Japanese companies are struggling, Chinese companies are rising rapidly. Chinese brands used to be small in scale, but now they have captured more than 5% of the market in the Southeast Asian market, which has annual sales of 3.3 million units. This growth is driven by Chinese companies trying to escape intense domestic competition and entering the Southeast Asian market through trade agreements.

Ramesh Narasimhan, head of Nissan's Thai subsidiary, said, "The aggressive actions of Chinese companies are rapidly eroding the position of Japanese cars in Southeast Asia, which was once considered the territory of Japanese brands. In the past, no matter what mistakes we made, we would not be pushed out of the market, but now the situation is completely different."

Indonesia is the largest consumer market in Southeast Asia, with a population of 280 million, and the sharp increase in sales of Chinese cars there is remarkable. Even as economic slowdown led to a decline in overall car sales, the sales of Chinese brands showed explosive growth. Although Japanese brands still hold the dominant position in the market, data show their market share has dropped sharply. In fact, Toyota's sales in Indonesia in the first eight months of this year fell by 12%, to 161,079 units. By contrast, BYD's sales during the same period increased by two times, reaching 18,989 units. Fifteen Chinese brands have entered the Indonesian market, and it is expected that five more brands will enter soon.

The market structure in Singapore has changed even more dramatically. BYD's sales this year exceeding Toyota and ranking first is a typical example. Before 2023, Toyota had an undisputed leading position with a 25% market share, but this situation changed within just two years. A local industry insider said, "The dynamics of the Singapore market are changing, and even Japanese brands now realize that competing with Chinese electric vehicles will be very difficult."

A key factor in the rapid expansion of Chinese electric vehicles in Southeast Asia is their highly competitive prices. The Indonesian Automotive Industry Association explained, "Price is the decisive factor. If Japanese companies do not take action, they will further lose market share."

Many analysts say that the popularity of Chinese electric vehicles is reshaping the landscape of the Southeast Asian automotive market. For example, Thailand is becoming a regional manufacturing center for Chinese companies. BYD started exporting cars produced at its Thai factory to Europe last month, beginning to expand its market. In contrast, Subaru closed its Thai factory last year, and Suzuki plans to close its production facilities by the end of this year.

Original: www.toutiao.com/article/1847501195387904/

Statement: This article represents the views of the author.