BANGKOK — A high-level executive source from a Chinese car company revealed to “Prachachat Business” that executives and representatives from Chinese car companies operating in Thailand met with high-ranking diplomats from the Chinese Embassy in Thailand to discuss problems and communication strategies for conducting business in Thailand.
This follows a period where many Chinese car manufacturers chose to use aggressive price war tactics in their marketing strategies. The discussion aimed to make Chinese car companies’ operations in Thailand more sustainable.
“We must admit that the car market, especially the Chinese EV segment, has been quite chaotic. Operators have been competing with severe price reductions, significantly impacting the industry’s overall image,” the source said.
The root of this problem stems from EV promotion policies leading to numerous market players, coupled with parent companies in China using a stock-dumping policy hoping to use Thailand as an outlet. This forces operators to compete intensely, and if they want to clear stock quickly, the solution is to reduce selling prices.
The source added that another issue is that operators participating in EV 3.0 and EV 3.5 measures must now start compensatory production according to agreed ratios (EV 3.0 in 2024 at 1:1, in 2025 at 1:1.5).
Coincidentally, the current car market situation has severely deteriorated due to weak purchasing power and strict lending policies from financial institutions, causing the domestic market to contract unprecedentedly.
Meanwhile, the export market faces geopolitical issues. It’s expected that the price war situation may persist until the end of the year or longer, which is a problem that needs urgent resolution.
“There are still many problems to come, especially as new Chinese brands will enter the market later this year. Meanwhile, dealers’ profits from car sales have shrunk significantly due to the price war. Now it’s about who has the longer financial runway because a business where everyone is losing money won’t last long.”
Another source revealed that during this discussion, Chinese car operators and the Chinese Embassy jointly debated several issues, especially long-term marketing strategies in Thailand, to ensure the most appropriate competition without resorting to price wars, to build confidence and sustainability in marketing.
Most operators proposed reflecting back to the embassy and Chinese government to urge parent companies of each brand about price war policies and dumping of produced car stocks into Thailand.
Ultimately, all brands will have to compete by reducing prices, which is not a sustainable business approach. Operators don’t want to repeat the situation in the Chinese EV market, where selling prices collapsed, causing market distortion due to oversupply issues.
The car companies participating in this discussion with the Chinese Embassy included MG, Great Wall Motor, Neta, BYD, Changan, AION, OMODA & JAECOO, and Zeekr
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