Red carpet rolled out for Chinese EV manufacturers in Thailand, Toyota and Co a thing of the past?

Thailand profits from the rise of Chinese EVs. Should Japanese auto manufacturers such as Toyota be worried about their new friends?

There's just no two ways about it, China's presence in the car market in South East Asia is growing bigger and bigger by the day, and it seems they are ready to grow even bigger in Thailand, a place where Toyota considers to be their backyard.

Before Japanese auto manufacturers- in particular, Toyota - poured a lot of money into the country, Thailand was never known as one of the world's leading regional motor manufacturing centres. Since then, Thailand is even considered now as the Detroit of Southeast Asia.

According to FMT, Toyota has invested so much in Thailand, to the point where it and its group of companies employ 275,000 people in The Land of Smiles. By some estimates, that accounts for 4% of the country's gross domestic product.

However, the rise of ambitious electric vehicle makers such as BYD has presented Toyota and Japan with its first serious rival in the country, where they have even bought a large piece of land considered to be one of the biggest transactions in the last two and half decades.

FMT reported that Chinese EV maker BYD signed a deal to buy almost a square kilometre of land in Rayong, on the east coast of the Gulf of Thailand. It will start producing electric vehicles there in 2024. The seller, Thai industrial estate developer WHA, says it was the company's biggest transaction in 25 years. 

They continued on by saying that the transaction has also likely made China the biggest investor in Thailand for 2022, dethroning Japan for the first time since 1994, according to data compiled by JETRO.

“It shows their ambition,” says David Nardone, CEO of WHA’s industrial development division. “The Chinese have been the most aggressive investor and they are coming from a market where they have the highest EV volumes in the world.”

Picture credit: Autospinn

“The competition between Japanese and Chinese is likely to become more intense as Chinese automakers shift production to Thailand to go around the economic decoupling of the US and China,” predicts Hajime Yamamoto, a Bangkok-based auto analyst with Nomura Research Institute.