Improving political trust backs up closer economic partnership: experts
Chinese new-energy vehicle (NEV) companies are expanding to Southeast Asian market at an unprecedented speed amid strengthened economic ties, increased political trust, and supported with a slew of preferential policies under the Regional Comprehensive Economic Partnership (RCEP).
Apart from growing sales, the NEV makers are stepping up efforts to set up assembly lines, providing localized services and building up a whole industrial chain in a vehicle market historically dominated by Japanese automakers.
At the China-ASEAN Forum on Emerging Industries held in Shenzhen, South China’s Guangdong Province, from Tuesday to Wednesday, officials and leading industry players from RCEP member countries shared the latest NEV development progress in the region, while discussing how to promote a smoother environment for the emerging industry.
BYD continues to strengthen exchanges and cooperation with ASEAN countries, and it has built the company’s first overseas passenger car production base in Thailand, Wang Chuanfu, chairman and CEO of BYD, said at the opening ceremony of the forum on Tuesday.
Wang said the planned annual output at the Thai base is 150,000 vehicles, with construction starting in March this year. It is expected to achieve mass production in 2024 and provide 5,000 job opportunities for locals.
“We will speed up the overall layout in the ASEAN market and provide consumers with a richer experience in NEV products and services,” Wang said.
Qu Jizong, executive deputy general manager of Chery International Corporation Indonesia Branch, introduced Chery’s relevant strategies in ASEAN market at a parallel forum on Wednesday. Qu disclosed that the company will set up factories in Indonesia, Malaysia and Thailand respectively to realize the full coverage of Chery electric models in the region.
“Chinese carmakers absolutely occupy a dominant position in Thailand,” Tang Zhimin, dean of the International School of the Panyapiwat Institute of Management and director of the China-ASEAN Research Center, told the Global Times on the sidelines of the forum on Wednesday.
Four of the top five models of pure electric vehicles in Thailand in 2022 were Chinese brands, Tang said, noting that BYD Atto 3’s market share reached 37.5 percent in the first quarter this year.
Thailand is the largest NEV market in Southeast Asia. It accounts for 58 percent of NEV sales in ASEAN market in 2022, followed by 20 percent in Indonesia and 16 percent in Vietnam, according to Tang.
Compared with other markets, the ASEAN market is relatively stable both from a geopolitical dimension and a supply chain perspective, industry players noted, underscoring the stability and a huge-complementary industry structure as the key reasons bolstering Chinese NEV makers’ local presence.
The mega free trade deal, RCEP is also conducive to further promoting the integration of the NEV industrial chains across the Asia Pacific region, and leveraging the comparative advantage of both China and ASEAN to its full extent.
But challenges such as the market’s long-term preference for Japanese models,
Japanese carmakers’ long-established capability in the traditional car sector, as well as a lack of unified standard and regulation for the NEV industry in the region still remain, industry players told the Global Times.
“The race just got started,” Wang Chengjie, vice president of Hozon Sales and managing director of Neta Auto Thailand, told the Global Times on Wednesday, adding that building a cost-efficient, complete supply chain will take time, and Japanese automakers remain “strong” competitors for Chinese carmakers.
Moreover, uncertain standards for the industry also pose long-term risks, as it means uncertainty for Chinese firms’ huge investment, and unpredictable risks in many important decisions, Wang said, calling for Chinese NEV makers to “display leadership” in the standard-making process.
China and the ASEAN are highly complementary in industrial structure and there is strong willingness for exchanges and cooperation among businesses on both sides, Minister of Industry and Information Technology Jin Zhuanglong said at the opening ceremony on Tuesday.
Noting that ASEAN has enormous potential for industrial transformation and innovative development, Jin said China will work with the region to stimulate innovation vitality and promote high-quality development of key areas by focusing on sectors including NEVs, digital economy and electronics.
Sales of NEVs in China accounted for 60 percent of the world’s total from January to April, and the NEV exports have remained very strong thanks to the nation’s strong industry chain and manufacturing power, said Cui Dongshu, secretary general of the China Passenger Car Association in early June.
(Global Times)
