Thailand’s car market has been monopolized by Japanese brands. Now, Chinese EV manufacturers are trying to find a way to access niche markets of the Thai auto industry.
Photo from CFP
By CHENG Di
In 96 hours of presales for their latest model the ORA Good Cat, Great Wall Motors (GWM) received over 10,000 orders in Thailand. The carmaker acquired GM’s manufacturing plant in the eastern coastal city of Rayong in February last year and started production in November.
The ORA Good Cat is the second GWM model in Thailand, after the Haval H6 HEV which went on sale in June. Designed with Thailand in mind, and against industry expectations, the H6 is a battery-only subcompact. Other Chinese carmakers including BYD and SAIC are also dabbling in the Thai market with small BEVs.
In China, GWM is best known for its SUVs and pickup trucks. And in Thailand, lower taxes on pickups, lower cost of diesel vehicle ownership, a large rural population have made pickup trucks popular, accounting for almost half the vehicles sold in the country last year. The Thai pickup truck market has been dominated by Japanese carmakers since the 1990s, taking up 90.7 percent of the market last year. China’s SAIC, a newcomer, ranked 6th with only 1.5-percent of the market.
But in 2019, sales of small cars reached 320,000 units, much more than SUVs and MPVs, and also dominated by Japanese brands. According to Northeast Securities, in 2019, seven Japanese manufacturers held 86 percent of the market in Thailand but offered very little choice at the subcompact end. Chinese subcompacts like the BYD e6 and ORA Good Cat provide Thai customers with more choices.
Thailand has been trying to attract EV manufacturers since 2015 and aims to become Southeast Asia’s EV export center by 2035. Companies that invest more than US$150 million (960 million yuan) are exempt from corporate income tax for eight years.
From 2017 to 2019, 26 EV production projects worth more than US$2.4 billion were begun, the most significant belonging to Japanese and German brands, such as Nissan, Toyota, BMW, and Mercedes-Benz, but the best-seller in 2018 was the new BYD e6. Bangkok acquired 1,000 e6 as taxis and ride-hailing vehicles that year. According to Surapong Paisitpatanapong of the Federation of Thai Industry, around 7,000 BEVs will be sold this year.
A new FTA between China and Thailand means there is now no import duty on Chinese EVs.
EVs are growing in Thailand, but still occupy a tiny fraction of demand compared with gasoline cars, partly because of poor infrastructure in most of Thailand except for Bangkok. Only about 2,000 EVs were sold in Thailand last year, but it was already a remarkable 150 percent growth compared with the year of 2019. Surapong Paisitpatanapong, vice-chairman and spokesman of the Federation of Thai Industries (FTI)'s automotive club, said in an interview in 2020 that he expected Thailand to see about 6,000 new EVs on roads by the end of 2021.
The Thai government said in April that it hopes to say goodbye to petrol engines by 2035. The subcompact models offered by Chinese manufacturers happen to meet Thailand’s demand.