Chinese E.V. Makers Rush In and Upend a Country’s Entire Auto Market

 

A man seated inside a vehicle, inside a factory.

China’s electric vehicle companies are making inroads in Thailand, a key industry hub, as Europe and the United States wield tariffs to keep them out.

Ma Haiyang and eight of his colleagues arrived in Thailand a year ago to establish the first overseas operation for GAC Aion, an electric vehicle maker from China. They had no office, no factory, no local employees and, basically, no clue.

The Aion team set up shop in a Bangkok hotel, commandeering conference rooms and holding meetings in the lobby. They had a long list of things to do: Find office space, recruit dealers and devise a business strategy. The team worked around the clock and, 74 days after arriving in Thailand, sold its first electric vehicle.

“The window of opportunity for Chinese new energy vehicles going overseas will be relatively short,” said Mr. Ma, general manager at Aion for Southeast Asia, using China’s preferred phrase for fully electric and gas-electric hybrid vehicles. “This is why we wanted to hurry up,” he added.

Chinese electric vehicle manufacturers like Aion are stampeding into overseas markets. Thailand is one of the first countries to experience the sudden influx of China’s automobile brands, and is confronting how their ambition and competitiveness are reshaping its car industry.

The arrival of China E.V. Inc. is evident everywhere in Thailand. Billboards are blanketed with advertisements for Chinese cars. Land prices are soaring because so many Chinese firms are building car factories.

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People wearing white uniforms and hard hats inspecting the chassis of a vehicle
Aion adapted its Chinese cars for the local market, turning up the power of the air-conditioning and strengthening the chassis for poor road conditions.Credit…Lauren DeCicca for The New York Times
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A group of white cars lined up in a car park.
Electric vehicles at an Aion dealership.Credit…Lauren DeCicca for The New York Times

The fast changes in the Thai auto market also show how Chinese companies are leaping ahead of their global rivals in Japan, which has shunned E.V.s, and the United States, where Tesla dominates the sector.

Last year, sales of popular Japanese brands such as Nissan, Mazda and Mitsubishi plummeted as consumers bought new electric cars from Chinese manufacturers instead. Dealers that had worked with Japanese and American automakers for decades were now turning over showrooms to make way for Chinese vehicles. Amid an increasingly crowded field, Chinese brands are slashing prices on electric vehicles.

The overseas push is the next phase in Beijing’s long-term strategy to focus on new energy vehicles and upend the balance of power in the automobile industry.

After years of government support for the sector, Chinese manufacturers are adept at mass-producing electric vehicles. They have established dependable supply chains, while working out the kinks to reduce prices.

That international push has been met with tariffs in two major auto markets to prevent a glut of Chinese vehicles from crushing homegrown competitors. Last month, the European Union said it would impose tariffs of up to 38 percent on electric vehicles imported from China into the bloc. A month earlier, the United States quadrupled tariffs on E.V.s built in China.

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Ma Haiyang is seated behind a desk and looking out the window.
“The window of opportunity for Chinese new energy vehicles going overseas will be relatively short,” said Ma Haiyang, general manager at Aion for Southeast Asia. “This is why we wanted to hurry up.”Credit…Lauren DeCicca for The New York Times

Thailand is small by comparison, but it is the biggest market in Southeast Asia. Known as the “Detroit of Asia,” it serves as a regional manufacturing hub. Its proximity and strong trade ties to China also allow Chinese cars to be imported quickly and inexpensively.

“It’s a beachhead market,” said Tu Le, a managing director of the consultancy Sino Auto Insights. “It suits a lot of Chinese brands because of the lower price point.”

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