Chinese carmakers are accelerating their entry into Thailand.
The Thai automotive market has braced for structural changes as Japan-based Suzuki Motor plans to close a subsidiary's plant in 2025 and Subaru will cease local production by the year's end.
Automotive suppliers based in Thailand said one of the Japanese automakers maintained sluggish sales in Thailand but performed well in other Southeast Asian countries. Therefore, the company decided to redistribute its resources.
Sources said the other Japan-based carmaker was impacted by another company's testing scandals and stopped manufacturing certain vehicle models and components. This situation led to the closure of the carmaker's factory in Thailand.
Chinese media reported that the rise of China-based automakers was edging out their Japanese rivals. Sources said Chinese EVs are indeed popular among the younger generation in Thailand. These cars offer fresh technology experiences with affordable prices, winning over young buyers with limited budgets.
The new technology experiences that Chinese vehicles' smart cockpits provide have threatened Japan-based carmakers and pushed them to adjust their plans. Japanese companies have added infotainment systems, smartphone connections, and other features to their smart cockpits. Supply chain sources said this situation facilitated the recovery of orders.
Japanese carmakers remain dominant in Thailand while their Chinese counterparts are catching up. China's fierce car market competition seems to have extended to Thailand, where Chinese automakers have reduced prices.
In May, BYD cut 20% off featured new vehicle prices in Thailand. Changan Automobile launched its low-priced mini battery EVs. About 10 Chinese car brands have rolled out cars in the Southeast Asian country and have been involved in price competition since 2023. In addition to BEVs, China-based automakers have introduced hybrid EVs to the market, directly impacting Japanese carmakers.
The decreasing vehicle prices do not mean Thailand has a growing EV market. According to AutoLiv Thailand, BEV sales in the country were 3,600 units in February 2024, down by 73% from January and 34% from 2023. This was primarily because the government reduced EV subsidies this year, creating uncertainty in the market.
Thailand has seen its demand for automobiles decline. According to Nikkei, the country's total vehicle sales were 47,000 units in April 2024, a 21% decrease from last year. The year-on-year growth of sales volume has declined for 11 consecutive years.
In the same period, Toyota experienced a 1% sales volume decrease from 2023 in Thailand while staying the top-selling automaker. Isuzu saw a 49% decline. Honda decreased by 10% and Mitsubishi Motor by 22%. As for Chinese carmakers, BYD's sales volume dropped by 49% year-on-year. The Great Wall Motor saw a 45% decline, while SAIC-owned MG decreased by 24%.
