Carmakers Race to Establish Footholds in Thailand (AI Translation)

【周刊提前读】车企争相抢滩泰国 红海变“深红”

The 46th Bangkok International Motor Show, held in April 2025, highlighted the rapid ascent of Chinese automakers in Thailand, Southeast Asia’s largest automobile producer. For the first time, Chinese brands secured five of the top ten spots for vehicle orders, with BYD leading at over 10,000 orders, even surpassing the long-dominant Toyota. GAC International and Changan Automobile also overtook legacy brands like Honda. At the show, 41 global automakers, including 16 Chinese brands—with Chery and Radar making their Thai debuts—participated, signaling aggressive Chinese investment in the Thai market since 2012. Major Chinese manufacturers began entering Thailand due to favorable local EV (electric vehicle) subsidy policies, especially since 2022, resulting in rapid market penetration by brands like BYD, Neta, GAC, Changan, and Chery.[para. 1][para. 2][para. 3][para. 4]

Offering high cost-performance vehicles is a central strategy for Chinese automakers. BYD’s Dolphin model, for example, saw its price drop by nearly 40% since its 2023 launch, while GAC’s AION UT, priced lower than competitors, attracted more orders than BYD’s offering at the show. Technological and value gaps between Chinese and Japanese models have widened: Chinese vehicles, even in affordable segments, come equipped with advanced digital and infotainment systems, while Japanese models often feature outdated technology at higher prices. Nevertheless, the Thai market is experiencing a downturn; in 2024, vehicle sales dropped 26.2%, primarily due to household debt and tight credit, though electric vehicle market share grew to 11.8% of total sales.[para. 5][para. 6][para. 7][para. 8]

Despite market contraction, Chinese NEV (New Energy Vehicle) makers continue investing in Thailand, building local assembly plants to benefit from government subsidies, and establishing production bases with a combined annual capacity exceeding 550,000 vehicles. However, this has led to overcapacity, slow-growing demand, and intense price wars. Some automakers plan to export Thai-assembled cars to regional or global markets, though manufacturing in Thailand is about 20% more expensive than in China, and the need for localization—such as sourcing 40-50% of parts locally—adds cost and complexity.[para. 8][para. 9][para. 10][para. 11]

Chinese brands stand out for advanced features, strong design, and lower EV operating and maintenance costs, factors increasingly winning favor among Thai consumers. The growing popularity of Chinese EVs is visible on the roads and in business partnerships, such as BYD’s deal with Grab to supply 50,000 EVs in Southeast Asia, and GAC’s partnership with Thailand’s Airports of Thailand (AOT) for EV taxi services. The expansion of charging infrastructure remains critical for further EV adoption.[para. 12][para. 13][para. 14][para. 15]

With electric vehicle market share rising—Chinese brands controlling 80% of Thailand’s EV sector by early 2025—longtime Japanese incumbents are feeling pressure, leading to plant closures and investments in hybrid and EV production by Toyota and Honda. Meanwhile, Chinese automakers are diversifying, introducing diesel and hybrid pickups to challenge Japanese dominance in key segments.[para. 16][para. 17][para. 18]

Thailand’s automotive sector is now a “crimson red ocean” of competition, fuelled by generous—but increasingly stringent—EV subsidies. Automakers must ramp up local production to comply with evolving government policies, or risk penalties. Higher local production costs, limited economies of scale, supply chain challenges, and labor cost differences complicate matters further.[para. 19][para. 20][para. 21][para. 22][para. 23]

Looking forward, some Chinese brands view Thailand as a springboard for exporting to ASEAN and even Europe, especially amid new US and EU tariffs on China-made EVs. However, exporting from Thailand to Europe requires deep localization and raises costs, potentially eroding the price advantage of Chinese manufacturers. Overall, while Chinese automakers have transformed Thailand’s car market, ongoing price wars, regulatory challenges, and supply chain localization remain substantial hurdles in their globalization journey.[para. 24][para. 25][para. 26][para. 27][para. 28][para. 29][para. 30]