Why Chinese carmakers are eyeing Thailand
SIX DECADES ago, when Japan’s carmakers were minnows outside their home market, the future giants of global car manufacturing—Toyota, Nissan and Honda among them—began to expand production in Thailand. The South-East-Asian country’s early presence in the automotive supply chains means it is the tenth-largest producer of cars in the world, surpassing countries like France and Britain.
Today Thailand is once again a waypoint for the international ambitions of carmakers—this time from China. Chinese companies have been announcing investments in Thai factories left and right. In March BYD, which in the first quarter overtook Volkswagen as the best-selling car firm in China, broke ground on an EV factory in Rayong, already a carmaking hub. In April Changan unveiled a $285m investment to make its first right-hand-drive vehicles outside China. And on May 6th Thai officials said that Hozon, another Chinese firm, will produce its mass-market NETA V electric model in Thailand.
As their home market matures, domestic competition stiffens and China’s economic growth becomes more sedate, carmakers’ cost of acquiring new Chinese customers is becoming “just so high”, says Tu Le of Sino Auto Insights, a consultancy in Detroit. In recent months a price war has broken out in China between EV marques. Many carmakers see foreign expansion as the surer route to growth. China exported $21bn-worth of cars in the first quarter of 2023, 82% more than in the same period last year.
2023-05-11 08:35:06
Original from www.economist.com
rnrn