With a plant that could produce four cars a day, Siam Motors of Thailand teamed up with Nissan Motors in 1962, beginning a successful, long-lasting partnership with Japanese firms that turned it from a car dealer to an automotive pioneer.

However, the Thai family-owned firm is now looking at chances elsewhere after growing annual revenues to $7 billion as a result of that achievement.

Vice president Sebastien Dupuy stated in an interview that Siam Motors is in conversations with numerous Chinese automakers about prospective partnerships, notably for high-end electric vehicles.

“EVs will be a nice pocket of growth,” he said. “There is a market growing for that, and we want to capture the growth.”

In Thailand, where Chinese investments totaling $1.44 billion since 2020, including those made by BYD and Great Wall Motor, have opened a new front in a market that Japanese automakers have previously controlled, Siam Motors’ position underscores a rapid transformation that is currently under progress.

Japanese automakers are now in a fight for another important Asian market as a result of their cautious approach to EVs, according to registration data, industry officials, and analysts, which comes just after a sales crisis in China.

Thailand’s car sector is already beginning to change as Chinese EV manufacturers bring in their suppliers and local Thai businesses, particularly those with strong ties to Japanese enterprises like Siam Motors, look for new collaborations.

Following Indonesia as the largest sales market, Thailand is Southeast Asia’s top producer and exporter of automobiles. Due to their overwhelming market share, Japanese automakers have treated it nearly as an extension of their own market for decades.

But because to BYD’s investment in a new facility scheduled to open in 2024 and the government of Thailand’s aggressive efforts to attract Chinese EV companies, China eclipsed Japan as the country with the largest foreign investment in Thailand last year.

As Chinese automakers boost up exports and create overseas production hubs, partially in reaction to a hypercompetitive domestic market for electric cars, Thailand’s transition provides a test case for other economies.

Chinese manufacturers are also making a significant push in a market where EVs currently represent over a fifth of total sales in Europe, for instance, where rules to assist local EV production are still taking shape.

Before moving to Great Wall’s Ora Good Cat this year, Bangkok resident Pasit Chantharojwong drove a Toyota Corolla for 15 years.

“I’ll never go back to a combustion-engine car again,” said the 55-year-old teacher, who also drives part-time for a ride-hailing service.

According to government statistics, barely 1% of the almost 850,000 new cars registered in Thailand last year were electric vehicles. However, that percentage increased to more than 6% between January and April this year.

According to registration data showing 18,481 EVs sold between January and April, BYD is now the market leader, followed by China’s SAIC, Hozon, and U.S. automaker Tesla.

BYD automobiles made up more than 7,300 of those. Toyota, the leading brand in Thailand, which together with its partners Isuzu and Honda accounted for nearly 70% of all car and truck sales in Thailand last year, only produced 11 of the newly registered EVs this year.

By providing inexpensive EVs, Chinese brands might overtake Japanese manufacturers in the market share race by at least 15 percentage points over the next ten years, according to Hajime Yamamoto, a principal at Nomura Research Institute’s consulting office in Thailand.

“The Japanese are only able to target some of the premium segments,” Yamamoto said.

Toyota, which employs around 275,000 people and has invested close to $7 billion in Thailand over the past ten years with its group firms, confirmed to Reuters in a statement that it is contemplating EV manufacture there for the first time.

Toyota reported that 3,356 reservations had already been made for the electric bZ4X, which it started selling in Thailand last year.

Additionally, it has hinted at the arrival of an electric pickup truck, although Goldman Sachs noted in a note published last month that “there is a growing need for them to consider other product segment expansion.”

With intentions to become the primary regional production base, Thailand is aggressively pursuing investment in order to convert about 30% of its 2.5 million annual car production to EVs by 2030.

Thailand has been luring Chinese EV manufacturers with its ready subsidies and established supply infrastructure, which was mostly created for Japanese automakers.

These include reduced import duties in exchange for subsequent local assembly and a few tax advantages for EV production.

“We realise that if we would like to be the EV hub of the region, we cannot only build the car assembly industry,” said Thailand’s Board of Investment Secretary General Narit Therdsteerasukdi, who has travelled multiple times to China in recent months.

“We need to strengthen the whole ecosystem of EVs.”

As of May 31, the 14 projects from 13 firms that have received approval from the BOI have a combined yearly production capacity of 276,640 EVs.

According to Narong Sritalayon, managing director of its Thailand division, Great Wall chose Thailand as a regional hub for EVs due to the nation’s excellent infrastructure, supply, and skill base, as well as its growing prospects.

“You want to penetrate into a market that has purchasing power and will be able to support your growth plans in the future, especially in a new business like electric vehicles,” he said.

(Adapted from CNBC.com)

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