Chinese automaker BYD is taking a page out of the playbook of Japanese car manufacturers from decades ago, rapidly expanding its footprint across Southeast Asia and establishing itself as a dominant force in the region’s electric vehicle (EV) market.
BYD’s approach revolves around forging distribution partnerships with major conglomerates in various Southeast Asian nations. This strategy has not only enabled the company to extend its reach but also navigate the complex web of government regulations and understand local consumer preferences. Coupled with competitive pricing, BYD’s approach has struck a chord with consumers, making it a standout success.
According to data reported by Reuters, BYD models accounted for a significant 26% of all EVs sold in Southeast Asia during the second quarter of 2023. The BYD Atto 3 emerged as the region’s top-selling EV, contributing to the substantial growth of EVs in the market. In fact, EVs constituted 6.4% of all new passenger vehicle sales in Southeast Asia in the second quarter, a remarkable increase from the 3.8% recorded in the first quarter.
Commenting on BYD’s strategy, Soumen Mandal, a senior analyst at Counterpoint Research, noted that “BYD’s primary focus is on brand proliferation rather than optimizing profit margins.”
To solidify its presence in the region, BYD is investing $500 million in Thailand to construct a factory with the capacity to manufacture up to 150,000 EVs annually, starting in 2024. These vehicles will not only cater to the Southeast Asian market but also find their way to European consumers. The company has also entered into strategic partnerships with established distributors such as Sime Darby in Malaysia, Ayala Corp in the Philippines, Rever Automotive in Thailand, and Bakrie & Brothers in Indonesia.
Chee-Kiang Lim, Managing Director of auto sales consultancy Urban Science, highlighted the confidence-building aspect of BYD’s partnerships, saying, “If buyers are unsure or have any concerns, partnering with established players like Sime Darby, Bakrie & Brothers, or Ayala Corp will give them peace of mind, especially for aftersales support.”
Thailand, in particular, has proven to be a receptive market for BYD, accounting for 24% of the company’s overseas sales during the second quarter. Moreover, in Singapore, BYD is pursuing an innovative strategy by launching five ‘BYD by 1826’ showrooms that also serve as restaurants, adding an experiential dimension to its brand presence.
