By Devjyot Ghoshal and Stefanno Sulaiman
BANGKOK/JAKARTA (Reuters) — China's electric vehicle giant BYD (SZ:002594) has been on a tear in Southeast Asia, shooting past rivals including Tesla (NASDAQ:TSLA) 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 announcedRead more on investing.com