China’s BYD rides on partnerships to expand EV sales in Southeast Asia By Reuters

By Devjyot Ghoshal and Stefanno Sulaiman

BANGKOK/JAKARTA (Reuters) – China’s electric vehicle giant BYD (SZ:) has been on a tear in Southeast Asia, shooting past rivals including Tesla (NASDAQ:) to take more than a quarter of the share of EVs sold in the region.

Along with attractive prices, BYD’s early success is based on a pattern of distribution partnerships with large, local conglomerates that have allowed the carmaker to expand reach, test consumer preferences and navigate complex government regulations in the region, officials from three partners and analysts said.

This partnership model, similar to that pursued by Japanese automakers in some Southeast Asian countries decades ago, is helping BYD to build market share rapidly and contrasts with Tesla’s go-it-alone distribution – though it comes at a cost.

“At present, BYD’s primary focus is on brand proliferation rather than optimising profit margins,” said Soumen Mandal, a senior analyst at Counterpoint Research.

“By providing local dealers with more lucrative profit margins, BYD can cultivate trust and loyalty, paving the way for broader expansion.”

BYD did not respond to questions from Reuters.

The Chinese automaker sold more than 26% of all cars in Southeast Asia’s small but fast-growing EV market in the second quarter of 2023 and its Atto 3 model, priced starting at $30,000 in Thailand, was the regional bestseller, according to Counterpoint. Tesla prices the most basic Model 3 from about $57,500 in Thailand.

EVs constituted 6.4% of all passenger vehicle sales in Southeast Asia in the second quarter, up from 3.8% in the preceding quarter, and the region could gain in importance for Chinese automakers after the European Commission last week announced an investigation into Beijing’s EV subsidies.

‘NOT AN EASY MARKET’

BYD’s regional distributors include divisions of Sime Darby in Malaysia and Singapore, Indonesia’s Bakrie & Brothers, Ayala Corp in the Philippines and Thailand’s Rever Automotive.

BYD’s partnerships are helping it in a region where Chinese car brands do not have an established track record, said Chee-Kiang Lim, managing director for China at auto sales consultancy Urban Science. “If buyers are unsure or have any concerns, partnering with established players like Sime Darby, Bakrie & Brothers, or…