Chinese automakers are rapidly expanding their market share in Southeast Asia's electric vehicle market, which Japan has long dominated. China quickly took over the market by pushing mid- to low-priced electric cars.
On 30th (local time), the Financial Times (FT) of the United Kingdom reported, "As sales of inexpensive Chinese-made electric vehicles surge, the market dominance that Japanese automakers have maintained for decades in Southeast Asia is weakening," adding, "This foreshadows changes in other regional car markets as well."
According to global consulting firm PwC, the market share of Japanese companies led by Toyota, Honda, and Nissan in the passenger car markets of the six ASEAN countries—Indonesia, Malaysia, Thailand, the Philippines, Vietnam, and Singapore—fell from an average of 77% in the 2010s to 62% in the first half of this year. In contrast, Chinese companies, whose share had been negligible, grew to 5%.
In Indonesia, the largest market in Southeast Asia with a population of 280 million, the overall car market is slowing, but sales of Chinese cars are surging, FT reported. From January to August this year, Toyota's sales were 161,079 units, down 12% from a year earlier, while BYD jumped more than threefold to 18,989.
Patrick Ziegmann, a partner at PwC Malaysia, assessed, "The entry of Chinese electric vehicle manufacturers into the (Southeast Asian market) shows that the era of Japan maintaining an unrivaled position in Southeast Asia is over." Ramesh Narasimhan, former president of Nissan Thailand, also warned, "As China targets Japan's 'backyard,' Japanese companies will continue to lose market share."
The reason Chinese companies have been able to expand their share quickly is the low price of their electric vehicles. In Indonesia, Chinese-made electric cars start at about 200 million rupiah (16.9 million won). Jongkie Sugiarto, vice chairman of the Association of Indonesia Automotive Industries, said, "Price is the most decisive factor," adding, "If Japanese companies do not respond, they will continue to lose share."
In Singapore, Chinese company BYD has already overtaken Toyota to become the No. 1 brand by sales rate. As the Singapore government pursues policies to expand electric vehicle infrastructure, BYD aggressively expanded its market by opening flashy showrooms in downtown shopping malls and busy districts and by conducting active marketing through partnerships with food and beverage businesses.
Adam Mirza of Prestige Auto Export, a Japanese car exporter in Singapore, said, "The Singapore market is now at a turning point," and added, "Japanese brands acknowledge that it is hard to compete with China in the electric vehicle field."
As Chinese companies move into local production, their price competitiveness is expected to increase further. Currently, 15 Chinese brands have entered the Indonesian market, and five more are preparing to enter. Among them, at least three corporations have established local plants, and the rest are assembling cars through local partner companies. Thanks to this, Chinese companies are enjoying the Indonesian government's tariff exemption on battery electric vehicles.
In Thailand, BYD produced vehicles at a local plant for the first time 4th. Liu Xueliang, BYD's head of sales for the Asia-Pacific region, said, "In the past, Japanese automakers led the region's economic growth, but the final winner will be decided by consumers." By contrast, Subaru, a Japanese company, closed its Thai plant last year, and Suzuki also plans to withdraw from Thailand by the end of this year.