Chinese cars challenge Japan’s lead in Southeast Asia

Chinese car companies are building big factories in Southeast Asia, weaponizing low prices in an attempt to encroach on Japanese rivals’ 70%-plus share in the region.

This year’s Thailand International Motor Expo, which kicked off in late November near Bangkok, has been an unusually toned-down affair. Some automakers, including Toyota Motor, decided not to play background music at their booths out of deference to the late King Bhumibol Adulyadej.
Not so SAIC-CP Motor, a joint venture between Shanghai-based SAIC Motor, China’s largest state-owned automaker, and the Charoen Pokphand group, a Thai conglomerate. The venture promoted two models with upbeat music and video, punctuated by employees’ applause. Its MS GS was touted as an affordable fully loaded sport utility vehicle.

SAIC broke ground in late October on a plant in eastern Thailand’s Chonburi Province. With an annual output capacity of 200,000 units, this will be one of the Chinese company’s largest factories outside the mainland. SAIC has not disclosed the facility’s cost, but a Thai newspaper estimates a minimum of 30 billion baht ($842 million).

Elsewhere in Southeast Asia, SAIC and General Motors have joined hands to build a $700 million Indonesian plant that will turn out 150,000 Wuling brand vehicles a year.

SAIC is strong in marketing affordable cars. The compact MG3, which accounts for 70% of sales, is priced around 20% below the competing Toyota Vios. “I was surprised at how inexpensive it is, given how nice the design is,” said a teacher in Bangkok who bought an MG3 six months ago. (NEWSONJAPAN)

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