Market dominance in Southeast Asia by BYD
In the booming Southeast Asian EV industry, BYD has outperformed Tesla and its competitors. In this growing area, BYD controls over a quarter of the electric car market.
BYD’s success extends beyond low price; it’s due to its clever distribution collaboration with local corporations. This creative method has helped BYD grow its reach, understand customer preferences, and negotiate the region’s complex regulatory rules.
The cooperation approach used by Japanese manufacturers in Southeast Asia decades ago is similar. Despite its higher expenses, it distinguishes BYD from Tesla’s direct distribution approach. According to Counterpoint Research senior analyst Soumen Mandal, “At present, BYD’s primary focus lies in proliferating its brand, rather than optimizing profit margins.”
Building Trust via Local Dealerships
BYD has built confidence and loyalty by providing local merchants higher profit margins. This approach lays the groundwork for a larger growth. Note that BYD did not answer to Reuters’ strategic questions.
This Chinese automaker accounts for almost 26% of small electric car sales, according to Counterpoint. BYD’s Atto 3 model, beginning at $30,000 USD in Thailand, became the country’s best-selling EV in the second quarter of 2023. In comparison, Tesla’s Model 3 starts at $57,500 USD in Thailand.
In Southeast Asia’s second quarter, electric car sales rose to 6.4% from 3.8%. The European Commission’s probe into Beijing’s electric car subsidies highlights this region’s rising importance to Chinese manufacturers.
Managing Difficult Circumstances
Sime Darby in Malaysia and Singapore, Bakrie & Brothers in Indonesia, Ayala Corp in the Philippines, and Rever Automotive in Thailand are among of BYD’s regional distributors.
Chee-Kiang Lim, China Managing Director at Urban Science, said, “BYD’s partnerships have played a pivotal role in gaining traction in regions where Chinese car brands lacked a robust track record.” He noted that working with Sime Darby, Bakrie & Brothers, or Ayala Corp reassures cautious customers of post-sales service.
The Shenzhen-based automaker committed over $500 million in Thailand to build a cutting-edge facility. This plant will build 150,000 electric cars per year beginning in 2024 for Southeast Asian and European markets.
AC Motors, an Ayala Corp. subsidiary, is ambitious in the Philippines. Twelve BYD dealerships will open next year. Brand-building and convincing more buyers to choose electric cars are the main priorities now.
The aim was summarized by AC Motors Chief Automotive Business Officer Antonio Zara: “Range misconceptions must be dispelled. Dispelling price fallacies and conveying total cost of ownership.”
BYD Stunning Market Presence
BYD’s massive ads on tiny screens on elevated trains in Bangkok and on large billboards in rural towns show its presence in Thailand.
Thai distributor Rever turned down an interview with BYD to discuss the company’s marketing and distribution strategies.
In order to get into the competitive Indonesian market, BYD enlisted the help of VKTR Bakrie & Brothers to purchase 52 electric buses for the city of Jakarta. BYD’s Chief Strategy Officer, Alex Kim, noted the complexities of the Indonesian market and said VKTR is in talks to sell BYD electric buses.
Challenge Tesla’s Hegemony
Thailand became BYD’s biggest overseas market in the second quarter with 24% of its worldwide sales coming from EV purchasers. According to Counterpoint, Tesla failed to grab even 1% of the Southeast Asian market.
Tesla’s website displays just two outlets in the area, both in Singapore, a wealthy city-state. Despite Tesla hiring in Thailand and Malaysia.
In Southeast Asia, BYD’s dealer-centric business and strategic advice conflict with Tesla’s direct-to-consumer approach. Replicating Tesla’s strategy is difficult since no other developing EV brand has Elon Musk’s public curiosity or media visibility.
In conjunction with Sime Darby Motors, BYD has taken a unique approach to engaging tech-savvy young customers in Singapore. Their five “BYD by 1826” showrooms are also upmarket eateries. These restaurants provide meals named after BYD EV models and combine food and cars.
Jeffrey Gan, Managing Director of Retail and Distribution at Sime Darby Motors in Southeast Asia, Hong Kong, and Macau, said, “With BYD, we can reach more customers who want to know more about BYD or are just getting acquainted with the BYD brand.”