China’s BYD is challenging the dominant Japanese automakers in Southeast Asia with its electric vehicles (EVs). At the Bangkok International Motor Show, BYD drew large crowds, with many visitors citing the fuel efficiency of the EVs and their reliability.
BYD Co., China’s leading electric vehicle maker, is expanding its presence in the Southeast Asian market, where it faces strong competition from Japanese rivals. The company has recently announced plans to build its first EV production facility in Thailand, and is also exploring opportunities in the Philippines, Vietnam and Indonesia.
Key Takeaways
- BYD Co is challenging the stronghold of Japanese automakers in Southeast Asia’s EV market.
- Fuel efficiency is a crucial factor for consumers in Thailand, where the average income is low.
- BYD faces challenges in terms of product selection and after-sales service as it expands its local production line in Southeast Asia.
BYD plans to expand its product line-up in Southeast Asia and is building its first overseas manufacturing plant in Thailand, with the aim of producing 150,000 vehicles in 2024. However, the company faces issues with product selection and after-sales service, as there is no used EV car distribution market in Thailand.
BYD has also secured several orders for its electric buses from public and private sectors in Thailand, including Bangkok Mass Transit Authority, Airports of Thailand and True Corporation. BYD claims that its electric buses can save up to 60% of fuel costs and reduce carbon emissions by up to 80% compared to diesel buses.
Why Southeast Asia?
Southeast Asia is a strategic market for BYD, as it is one of the fastest-growing regions in the world, with a population of over 650 million people and a rising demand for mobility and transportation. According to a report by Frost & Sullivan, the Southeast Asian electric vehicle market is expected to grow at a compound annual growth rate of 28.3% from 2021 to 2025, reaching 1.9 million units by 2025.
BYD sees an opportunity to tap into this potential by offering affordable and reliable electric vehicles that can meet the diverse needs of customers in different countries. BYD also aims to leverage its expertise in battery technology, which gives it an edge over its competitors in terms of cost, performance and safety.
BYD, which stands for Build Your Dreams, is one of the world’s largest EV manufacturers, with a global market share of 11% in 2022. The company produces a range of electric cars, buses, trucks and batteries, and has a strong foothold in China, Europe and Latin America.
Southeast Asian market is a different challenge for BYD
However, the Southeast Asian market poses a different challenge for BYD, as it is dominated by Japanese carmakers such as Toyota, Honda and Nissan, which account for more than 80% of the region’s vehicle sales. These brands have established a loyal customer base and a wide distribution network in the region, and are also investing heavily in electrification.
To compete with the Japanese giants, BYD is leveraging its strengths in technology, innovation and cost-efficiency. The company claims that its EVs have superior performance, safety and reliability, as well as lower maintenance costs and environmental impact. BYD also boasts of its own battery technology, which it says gives its EVs a longer range and a faster charging time than its competitors.
BYD’s strategy for Southeast Asia is to localize its production and tailor its products to the specific needs and preferences of each market. The company has partnered with local firms to set up joint ventures and factories in the region, and has also hired local talent and experts to understand the market dynamics and consumer behavior.
One of BYD’s key markets in Southeast Asia is Thailand, which is the region’s largest automotive hub and a gateway to other countries. BYD has formed a joint venture with Rizen Energy Co., a Thai renewable energy company, to build an EV factory in Chachoengsao province, east of Bangkok. The factory, which is expected to start operations in 2023, will have an annual production capacity of 50,000 units and will produce both passenger cars and commercial vehicles for the Thai market as well as for export to other countries in Southeast Asia and Australia.
BYD is also eyeing opportunities in other Southeast Asian countries, such as the Philippines, Vietnam and Indonesia, which are competing to attract investments in EVs as part of their green growth agenda. BYD has been in talks with these countries to explore the possibility of setting up assembly plants or final-assembly facilities there, depending on the market size and demand.
BYD’s ambition is to become a leading player in the Southeast Asian EV market, which is expected to grow rapidly in the coming years as more consumers switch to cleaner and smarter mobility solutions. BYD believes that its EVs can offer a better driving experience and a lower total cost of ownership than conventional vehicles, as well as contribute to the region’s environmental sustainability and energy security.
