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… sold nearly 98,000 vehicles in the first five months of 2026.
The company's rise has been supported by an extensive charging network operated by affiliate V-Green and strong consumer support for a homegrown brand. VinFast is also moving aggressively into the mass market through lower-priced vehicles. Its recently unveiled VF2, priced at about USD 7,100, is the company's cheapest model yet and aims to broaden car ownership among middle-income consumers.
The Philippines, meanwhile, is lagging behind peers in ASEAN, or the Association of Southeast Asian Nations. Sales fell 14% to 97,988 vehicles year-on-year in the second quarter, making it one of the region's weakest-performing markets. Nevertheless, the government is betting that stronger EV demand can eventually be translated into local manufacturing.
On July 30, President Ferdinand Marcos Jr launched a <a title="" href="https://asia.nikkei.com/business/automobiles/electric-vehicles/philippines-joins-southeast-asia-s-ev-race-with-1bn-manufacturing-subsidy" target="_blank" rel="noopener">USD 1 billion incentive program</a> to support domestic EV production, offering co-funding for investments and production. The move reflects a broader regional race to attract EV investment and build local supply chains, following policy initiatives in Thailand, Indonesia, and Vietnam.
Singapore remained one of Southeast Asia's smallest car markets, with about 27,000 new vehicle registrations in the first half of 2026. Yet it has emerged as the region's most advanced EV market, with electric cars accounting for around 62% of registrations, up sharply from about 40% a year earlier.
The city-state's shift toward EVs has attracted automakers from China, Europe and elsewhere. BYD has consistently ranked as Singapore's top-selling brand, while luxury manufacturers are also betting on growing demand for electric models.
"Customers are highly informed," said Henrik Dreier, director of Singapore imports at Porsche Asia Pacific, as the company launched its new Cayenne Electric in July. "We believe the Cayenne Electric is perfectly suited to this market."
The contrasting experiences across Southeast Asia underscore how the region's EV transition is speeding up, albeit in different ways. Chinese brands have become an increasingly important force in Indonesia and Thailand. Malaysia is reaching a point where EVs are beginning to overtake hybrid options. Vietnam stands apart through the rapid ascent of national champion VinFast. And Singapore offers a glimpse of what a mature EV market in Southeast Asia could look like.
As EV adoption gains momentum, countries are increasingly looking beyond vehicle sales and toward manufacturing, supply chains and jobs. Reflecting that shift, the government in Manila, now seeking to play catch-up in that area, says its new program is designed to "position the Philippines as a regional automotive manufacturing hub."
This article first appeared on <a href="https://asia.nikkei.com/business/automobiles/ev-boom-drives-asean-car-sales-in-q2-with-indonesia-surging-34">Nikkei Asia</a>. It has been republished here as part of 36Kr’s ongoing partnership with <a href="https://www.kr-asia.com/nikkei-teams-up-with-36kr-in-asia-tech-news-coverage/">Nikkei</a>.

EV boom drives ASEAN car sales in Q2, with Indonesia surging 34%

East Asia

VinFast

Vingroup

China

Southeast Asia

Transportation

Electric Vehicles

Mobility

Singapore

Malaysia

Thailand

Vietnam

Indonesia

Philippines

Chinese <a href="/industry/ev">electric vehicle</a> makers including <a href="/company/byd">BYD</a>, <a href="/company/chery">Chery</a>, and DFSK introduced their first plug-in hybrid (PHEV) models in Indonesia at an automotive show near Jakarta that opened to the public on July 30.
The Chinese brands are making a foray into hybrid electric cars, as uncertainty lingers over the Indonesian government's plan to introduce a new incentive for EVs. The hybrid car market is dominated by Japanese automakers at present. The paucity of public charging stations outside Jakarta, meanwhile, remains a major hurdle to EV takeup in Southeast Asia's largest economy.
While Japanese brands like Toyota and Mitsubishi Motors, as well as their South Korean rival Hyundai, mostly stick to conventional hybrid models, the Chinese companies show a preference for PHEVs.
At the Gaikindo Indonesia International Auto Show (GIIAS) 2026 in Tangerang, on the outskirts of Jakarta, Chinese EV giant BYD unveiled the M6 DM-i, a PHEV version of its popular seven-seat M6 multipurpose vehicle.
"Many consumers are not yet ready to make the switch to fully electric vehicles," Luther Panjaitan, head of public and government relations at BYD Indonesia, told reporters on July 29.
He added that while many people are interested in EVs, they refrain from buying due to limited charging networks. This means "internal combustion engine cars still dominate the market."
With a starting price of IDR 298 million (USD 16,558.5), the M6 DM-i has attracted more than 4,000 preorders since bookings started two months ago, Panjaitan said, adding that taxi and ride-hailing companies are also weighing purchases.
"We may introduce additional PHEV models this year," he added, hinting that BYD might produce some cars locally at its plant in Subang, West Java, which recently opened. The factory is designed to have a production capacity of 150,000 vehicles annually.
DFSK, as well as Chery sub-brands Lepas and Jetour, introduced PHEV models aimed at Indonesian customers at the 11-day automotive show.
DFSK said it has received approximately 1,100 preorders for its E5 Plus SUV. Lepas introduced the L8 PHEV SUV with a starting price of IDR 589 million (USD 32,728), while Jetour rolled out its T2 i-DM, which starts at IDR 688 million (USD 38,229).
Wuling had earlier introduced PHEV offerings in Indonesia, with its Darion MPV and seven-seat Eksion SUV, although the models have yet to match the popularity of the company's EV lineup.
Chery unveiled its J6 Chery Super Hybrid, a range-extended EV with a claimed driving range of up to 1,000 kilometers per charge. The company has begun taking preorders but has yet to reveal its pricing.
"Consumers are looking for vehicles that offer an electric driving experience without compromising the convenience of long-distance travel," said Budi Darmawan, vice country director of the Chery business unit.
Not all Chinese carmakers are jumping into the market. <a href="/company/gac">Guangzhou Automobile Group</a> (GAC) has shelved a plan to launch its E9 PHEV, a premium model. GAC Indonesia CEO Andry Ciu cited unfavorable market conditions including high fuel prices, the weakening rupiah, and slowing economic growth.
Japanese and South Korean companies, meanwhile, remain focused on conventional hybrid vehicles.
Mitsubishi Motors introduced a hybrid version of its subcompact crossover SUV, the Xforce, its first hybrid car model in Indonesia. Hyundai recently introduced the Staria hybrid MPV.
"We will leverage our nationwide sales and service network to drive growth," said Atsushi Kurita, president director of the distributor of Mitsubishi Motors in Indonesia.
An executive at another Japanese automaker said Chinese brands appear to have recognized the limits of relying solely on fully electric cars in the Southeast Asian country.
"That is why they are broadening their lineups with plug-in hybrids and range-extender models," the executive said. "Competition is likely to intensify as these vehicles increasingly overlap with the hybrid segment, which has long been a core strength of Japanese automakers."
The Indonesian government has floated a plan to subsidize 200,000 EVs, split evenly between cars and motorcycles, initially intending to begin the program in June. But as of Thursday, the timing remains unclear.
Between January and June, the Association of Indonesian Automotive Industries (Gaikindo) reported 69,739 electric car sales in the country, nearly double the number from a year earlier. That represents 18% of total car wholesale purchases in Indonesia during the period. Overall, such sales rose 22% to 386,564 cars, with purchases still dominated by internal combustion engine models. Hybrid car sales jumped 47% to 42,366 vehicles, and PHEVs, while still small, tripled to 5,003 vehicles.
BYD and Jaecoo, another Chery sub-brand, accounted for 5.3% and 4%, respectively, of all sales. While Japanese brands, especially Toyota and Daihatsu, still dominate the Indonesian market, their market shares have declined over the past few years.
This article first appeared on <a href="https://asia.nikkei.com/business/automobiles/electric-vehicles/byd-other-chinese-brands-launch-hybrid-models-in-indonesia">Nikkei Asia</a>. It has been republished here as part of 36Kr’s ongoing partnership with <a href="https://www.kr-asia.com/nikkei-teams-up-with-36kr-in-asia-tech-news-coverage/">Nikkei</a>.
Note: IDR figures are converted to USD at rates of IDR 17996.81 = USD 1 based on estimates as of August 4, 2026, unless otherwise stated. USD conversions are presented for ease of reference and may not fully match prevailing exchange rates.

BYD, other Chinese brands launch hybrid models in Indonesia

GAC Group

Chery

Japan

South Korea

… trip is 2.6 times greater than that of low-speed autonomous delivery vehicles.</li>
</ol>
Pony.ai is positioning its fourth-generation autonomous heavy-duty truck for long-haul freight and is gradually expanding into port logistics.
Its light-duty truck will focus on express delivery, retail distribution, and cold chain logistics.
whereRelatedArticle
Across both categories, Pony.ai said its underlying foundation remains the same principle it has followed since its founding more than a decade ago: using a single autonomous driving system across all vehicle types.
Discussing the company’s competitive barriers, He said Pony.ai’s robotruck strategy, whether applied to light- or heavy-duty trucks, is based on integrating its resources as efficiently as possible.
“Our capital efficiency and the speed of our technology iteration could be several orders of magnitude higher than those of competitors focused on a single vertical,” he said.
“We spend less from a cost perspective, while setting a higher benchmark in terms of capability,” he added. “For us, it is a good thing when more partners can thrive and the industry gains broader recognition. That helps us reach our ultimate goal by expanding the overall market.”
However, He acknowledged that the threshold for deploying robotrucks at scale, particularly heavy-duty trucks, is higher than it is for robotaxis.
“From another perspective, a high threshold is not necessarily bad for the industry,” he said. “If the threshold is too low, lower-quality operators can crowd out better ones. Companies may focus too heavily on cost and so-called scale, causing them to abandon features designed to ensure safety.”
“If a major accident occurs, it could have a devastating impact on the industry,” he added.
He said Pony.ai had continued developing autonomous heavy-duty trucks for years because its experience with world models, AI systems designed to simulate and predict how environments behave, and large-scale operations gave it confidence that it could clear that threshold.
“That is Pony.ai’s advantage and the result of its long-term accumulation,” he said.
According to He, Pony.ai expects to deploy 500–1,000 heavy-duty trucks over the next two to three years and 100,000 light-duty trucks by 2030.
This <a href="https://xueqiu.com/2854806290/403755216">article</a> was adapted based on a feature originally written by Stone Jin and published on IPO Zaozhidao. KrASIA is authorized to translate, adapt, and publish its contents.
Note: RMB figures are converted to USD at rates of RMB 6.76 = USD 1 based on estimates as of August 6, 2026, unless otherwise stated. USD conversions are presented for ease of reference and may not fully match prevailing exchange rates.

Pony.ai outlines deployment plans for heavy- and light-duty robotrucks

Pony.ai

Autonomous Vehicles

Logistics

Autonomous Driving

… parameters and activates 13 billion parameters for each token, about one-tenth and one-eighth of Kimi K3’s respective figures. DeepSeek left the architecture and parameter scale unchanged, focusing the update on post-training.
Across the coding and agent benchmarks published by DeepSeek, the official version significantly outperformed the preview release. It also surpassed the previous preview version of V4-Pro.
On Arena’s <a href="https://arena.ai/leaderboard/code/webdev">overall WebDev leaderboard</a>, which evaluates website development and multiturn tool use, the model’s public score rose to 1,577 at one point, close to GLM-5.2. Only a handful of models ranked higher, including Kimi K3, Claude Fable 5, and GPT-5.6 Sol.
DeepSeek V4-Flash showed that post-training can still produce substantial improvements in core capabilities such as coding without adding vision or significantly increasing the model’s parameter count.
As long as this approach continues to deliver rapid gains, foundation model companies are unlikely to reach a common answer on how many resources they should allocate to vision in advance.
Alibaba’s newly released Qwen3.8-Max has taken a broader, all-in-one direction similar to Kimi K3. It has 2.4 trillion total parameters and activates 95 billion parameters for each token while supporting native vision, coding, and Cowork capabilities.
The strategies chosen by foundation model developers are not determined by technical findings alone.
“In the end, the decision over how large a model should be and which selling points it should emphasize may come down to just a few people, or simply the boss,” an industry source said.
The research backgrounds of core team members, intended product use cases, and training costs can all shape a company’s priorities.
The talent market is also responding. After Kimi K3’s release, 36Kr learned that more headhunters had begun appearing in cafes and restaurants near Moonshot AI’s offices. “Multimodality” had reportedly become the focus of their visits.
That does not mean every company will immediately combine extremely large parameter counts with native multimodality. Nor does it mean multimodality will replace coding as the main field of competition.
Several sources said coding remains the price of admission. A company whose models cannot reach the leading tier in coding may have little opportunity to compete in the next stage of the market.
For China’s foundation model developers, the divide is not rooted in conflicting views about the long-term path toward artificial general intelligence. It reflects different assessments of timing and cost.
For now, competitive rankings, product development, and commercialization remain more heavily concentrated on coding and agent capabilities.
The competition is governed by two clocks.
Coding and agent rankings can change within months or even weeks. The transformation of models from language systems into systems capable of understanding the world will take much longer.
The first clock determines which companies can keep pace today. The second may ultimately determine how far they can go.
KrASIA features translated and adapted content that was originally published by 36Kr. This <a href="https://docs.google.com/document/d/1JahSCX8sOOuxyHxunrJ825s7N5aGBl3RaaNjQhg4X6g/edit#">article</a> was written by Li Zhaofeng for 36Kr.

Kimi K3 and DeepSeek V4 expose widening divide over native multimodality

Moonshot AI

Z.ai

Artificial Intelligence

Deep Tech

Foundation and Large Models

Chinese brands are gaining traction with thrifty young consumers in the US as inflation creates a tailwind for businesses competing on price, even in areas once led by Japanese companies like sushi and character merchandise.
Fifth Avenue in Manhattan is lined with shops of top luxury brands from around the world. Soon the flagship store of China's <a href="/company/pop-mart">Pop Mart</a>—creator of the Labubu character—will be among them, right next to Austrian jeweler Swarovski.
Pop Mart opened its first US store in 2023, and now has more than 70 stores there. While locations to date have focused on the suburbs, it will now have a Times Square location along with its Fifth Avenue store.
"Popmart is choosing to open stores in places like Times Square because it is a highly visible location where they can rely on high foot traffic and gain access to opportunistic sales," said Laura Pan, lecturer at Italy's SDA Bocconi School of Management.
Slowing domestic demand in China has pushed companies to seek growth in the US Pop Mart identified North America as a driver of revenue growth in its full-year earnings for 2025. Sales in North and Latin America rose more than sevenfold on the year to RMB 6.8 billion (USD 1 billion).
<a href="/company/luckin-coffee">Luckin Coffee</a> is another Chinese brand with locations in Manhattan, where an iced latte, the cheapest item on the menu, starts at around USD 2.
"Starbucks is too expensive," said Winnie Tan, who works in the city. "Luckin is much cheaper and the service here is fast."
Most Luckin locations are stands with no seating. During a roughly one-hour period on a recent weekday afternoon, dozens of customers came to pick up orders.
Luckin is expanding aggressively. It has about 20 shops in New York after opening its first location last summer. The company has kept expansion costs down by opening stores at former Starbucks locations.
Chinese food and beverage chains built around affordability are gaining popularity with younger Americans. <a href="/company/mixue-bingcheng">Mixue Bingcheng</a>, one of China's largest beverage chains, now has more than 10 stores in the US and is gaining traction with ice cream and drinks that start at USD 1–2.
Some Chinese companies are also expanding their US footprint by drawing on food culture that originated in Japan.
High-end sushi served in the popular chef's choice "omakase" format has attracted customers with its sense of exclusivity and the chance to interact directly with the chef, even at prices ranging from USD 200–500 per person. But things are beginning to change.
In New York, lower-priced businesses run by China-affiliated chefs have emerged, offering sushi course meals for less than USD 100. Many chefs come from Fuzhou, China, according to Bocconi University's Pan. That has led to the new term, "Fumakase," a portmanteau of Fuzhou and omakase.
It has become increasingly difficult for Japanese companies to compete on cost.
"We're expanding our customer base among independent cafes and other businesses in the US, but we can't quickly increase production volume, and Chinese products are taking market share from us," said Harusato Yamazaki, president at Yamaei, a green tea seller based in Japan's Shizuoka prefecture.
Masayuki Kobayashi, head of international business development at Tominaga Boeki Kaisha, a company based in Hyogo prefecture that exports green tea to the US, said, "In the US, quality standards vary, and many stores use low-cost Chinese green tea."
The rise of Chinese chains owes partly to US consumer sentiment. The consumer price index rose 3.5% on the year in June. Young people in particular, who have become thriftier amid prolonged inflation, tend not to be mindful of product's origin if it offers good value.
China was once known as the world's factory, with exports centering primarily on the manufacturing sector and sales to corporate customers. Now, consumer-oriented Chinese companies are using the US—the world's largest consumer market—as a test bed.
"We are happy about the growth last year. We suffered, but we're happy," Pop Mart COO Si De said in a June interview with Bloomberg. "Although things have somewhat reverted this year, it has given us stronger confidence. Once you've seen how big the opportunity is globally, it naturally drives greater conviction and a willingness to invest more resources."
This article first appeared on <a href="https://asia.nikkei.com/business/consumer/labubu-takes-manhattan-chinese-brands-target-inflation-hit-us">Nikkei Asia</a>. It has been republished here as part of 36Kr’s ongoing partnership with <a href="https://www.kr-asia.com/nikkei-teams-up-with-36kr-in-asia-tech-news-coverage/">Nikkei</a>.
Note: RMB figures are converted to USD at rates of RMB 6.77 = USD 1 based on estimates as of August 4, 2026, unless otherwise stated. USD conversions are presented for ease of reference and may not fully match prevailing exchange rates.

Labubu takes Manhattan: Chinese brands target inflation-hit US

Retail

Consumer Economy

Chenqi Technology, the operator of ride-hailing platform OnTime Mobility, issued a profit alert on August 3 forecasting stronger results for the first half of 2026.
The company expects to record consolidated revenue of at least RMB 3.9 billion (USD 576.7 million), an increase of at least RMB 2.224 billion (USD 328.9 million) from the same period in 2025. That would represent year-over-year growth of 132.6%.
Its loss is expected to narrow by at least 40% from a year earlier.
Chenqi has issued positive profit alerts for two consecutive reporting periods in 2026. Its gross margin has also turned positive over the past two years, indicating an improvement in its operating performance, although the company remains unprofitable.
Chenqi attributed the expected revenue increase mainly to higher ride-hailing order volume on OnTime Mobility. It also increased sales and marketing activity for its technology services, which contributed to revenue growth in that segment.
The company said the expected reduction in losses reflected greater operating efficiency and a more favorable cost structure in its ride-hailing business, along with higher technology services volume. Together, these factors increased gross profit.
Chenqi recorded revenue of RMB 1.676 billion (USD 247.8 million) in the first half of 2025 and RMB 3.61 billion (USD 533.8 million) in the second half, meaning second-half revenue was more than double the first-half figure.
Revenue for the first half of 2026 is expected to reach at least RMB 3.9 billion, up 132.6% from the same period a year earlier, driven in part by continued expansion of OnTime Mobility.
The disclosure also shows that both mobility services and technology services contributed to the expected revenue increase. According to the company’s previous financial results, revenue from the two segments grew 86% and 207%, respectively, in the first half of 2025.
The latest announcement did not provide separate growth forecasts for the two businesses in the first half of 2026.
Chenqi’s results indicate that its revenue mix is becoming less dependent on mobility services alone. Technology services are contributing a larger share of growth and may support further improvements in gross profit if the segment continues to expand.
The company is also moving beyond a period focused primarily on expansion. Revenue is growing, its gross margin has turned positive, and its losses are narrowing. However, its ability to achieve sustained profitability will depend on whether it can maintain growth while controlling operating costs.
In March, a research report from Soochow Securities said Chenqi’s performance had shown a clear trend of “strong growth, narrowing losses, and an optimized business mix.”
The report said the company’s revenue structure was shifting from a reliance on mobility services toward a combined mobility-and-technology model. It projected that Chenqi would become profitable in 2027.
This <a href="https://xueqiu.com/2854806290/403537836">article</a> was adapted based on a feature originally written by Stone Jin and published on IPO Zaozhidao. KrASIA is authorized to translate, adapt, and publish its contents.
Note: RMB figures are converted to USD at rates of RMB 6.76 = USD 1 based on estimates as of August 5, 2026, unless otherwise stated. USD conversions are presented for ease of reference and may not fully match prevailing exchange rates.

OnTime Mobility operator expects first-half revenue to more than double as losses narrow

… open quickly, maintain consistent quality, and continuously improve operational performance.
He said the expanding store network also strengthens Luckin’s brand influence and its ability to scale product innovation, creating a cycle of growth across stores, products, and customers. He described store expansion as a foundation for increasing the company’s long-term market share rather than an end in itself.
"We have always believed that the ceiling for China's coffee store market remains extremely high. As coffee penetration and consumption frequency continue to rise, that ceiling will keep rising,” Guo said. “We are confident that we can maintain a competitive pace of store openings, capitalize on the long-term growth opportunities in China's coffee market, and continue expanding our market share."
This <a href="https://xueqiu.com/2854806290/403518824">article</a> was adapted based on a feature originally written by Stone Jin and published on IPO Zaozhidao. KrASIA is authorized to translate, adapt, and publish its contents.
Note: RMB figures are converted to USD at rates of RMB 6.76 = USD 1 based on estimates as of August 5, 2026, unless otherwise stated. USD conversions are presented for ease of reference and may not fully match prevailing exchange rates.

Luckin Coffee surpasses 36,000 stores as Q2 revenue rises

Luckin Coffee

Coffee

… away by the latter. "It is one-third of the price but the key point is the electronics are very advanced in China," he said. "The car, its electronics, is even better than the Porsche."
This is also being reflected in the Thai market, where Chinese automakers are recording significant sales in the high-end market. For example, the Zeekr 009, a luxury EV minivan made by Geely, was offered for about THB 3 million (USD 89,824.9) when launched in 2024, one-third less than the similar Toyota Alphard minivan, Nikkei reported.
Despite its many collaborations with Chinese companies, Aapico has not been immune to the inexorable march of cheap high-quality Chinese vehicles. Its net profit fell from THB 1.6 billion (USD 47.9 million) in 2023 to 747 million the following year. In 2025 net profit fell again, to THB 731 million (USD 21.9 million). This year began more positively: the group recorded net profit of THB 314 million (USD 9.4 million) in the January-March period.
Most of the pain has been felt in Thailand, where Aapico's revenue fell 26.6% from a peak of THB 18.7 billion (USD 559.9 million) in 2023 to THB 13.7 billion (USD 410.2 million) last year. In contrast, its revenue from overseas operations grew slightly from THB 11.7 billion (USD 350.3 million) to THB 12.5 billion (USD 374.3 million) in the same period.
Domestic political instability "since the 1990s is the number one" reason for Thailand's current economic woes, Yeap said. "The politics has been volatile, you know, Remember the red shirts and yellow shirts, parking on the streets. The streets were all clogged up."
Minimal government support for business is another factor, he added. "In Thailand, to a certain extent, businesses drive themselves. The government helps a little bit, but not significantly, like Japan or Singapore."
The CEO said it is a "difficult question" as to whether all the Chinese foreign investment is good for the Thai economy. "Nobody in the world says foreign investment is bad, because foreign investment brings money. Right? Foreign investment brings jobs. And foreign investors have to [find] supply for whatever they manufacture locally or they export. So it cannot be bad, but it may destroy some of the local companies.
"So how do you equate good or bad? The economy may grow, but the local industry, some local industry, will be impacted."
Yeap said he has also been affected by Chinese manufacturers sourcing many of their parts from China, although he added that "fortunately the volume of Chinese cars is still small," with perhaps each manufacturer making a maximum of 50,000 vehicles in Thailand.
"So what we are doing today, I tell you, I'm intensely looking for Chinese companies to be partners. So that when they come, they will work with us," he said. "We are already here. Our plants are amortized, our land is amortized. So some of them will have to work with us."
This article first appeared on <a href="https://asia.nikkei.com/spotlight/asean-money/collaborate-with-chinese-ev-makers-or-suffer-thai-auto-firm-ceo-warns">Nikkei Asia</a>. It has been republished here as part of 36Kr’s ongoing partnership with <a href="https://www.kr-asia.com/nikkei-teams-up-with-36kr-in-asia-tech-news-coverage/">Nikkei</a>.
Note: THB figures are converted to USD at rates of THB 33.40 = USD 1 based on estimates as of August 4, 2026, unless otherwise stated. USD conversions are presented for ease of reference and may not fully match prevailing exchange rates.

Collaborate with Chinese EV makers or suffer, Thai automotive firm CEO warns

BAIC Motor, a Chinese joint venture partner of Mercedes-Benz, expects to book a net loss of up to RMB 1.65 billion (USD 243.9 million) (USD 244 million) for the first six months of the year, as price war pressure builds even at the higher end of the market.
For BAIC, the anticipated red ink marks a reversal from a net profit of RMB 359.96 million (USD 53.2 million) for the first half of 2025 and RMB 1.97 billion (USD 291.2 million) for the same period of 2024.
The core listed unit of state-owned Beijing Automotive Group attributed the loss to "intense competition in the domestic automotive industry" during the first half, as "sales fell short of expectations." The company, which also has a joint venture with South Korea's Hyundai Motor, mentioned "the impact of rising raw material costs, increased market investment and other factors."
Chinese automakers are being hit hard due to a combination of economic stagnation and overcapacity, fueling a pricing race to the bottom. BAIC's filing did not elaborate on the situation, but its German partner said more when it announced its first-half earnings on July 28.
Mercedes-Benz said its total sales for the period came to 837,195 units, down 7% from last year, "impacted by intense competition and subdued consumer sentiment in China, as well as by the effects of model changes." The sales decline in China was particularly steep, at 28% on the year to 210,245 units.
"The Chinese market was significantly down," the company said. The "market situation in the premium and luxury segment in China remained strained, with foreign manufacturers in particular experiencing significant decreases in unit sales."
Mercedes is pessimistic about the near-term outlook in China. "The market is expected to be significantly below the previous year's level," the carmaker warned, as "the ongoing intense price competition, especially by local manufacturers, is expected to lead to significantly weaker development of unit sales for many foreign manufacturers," both in the luxury and the midsize van segments.
The weak sales and prospects led Mercedes to book an impairment charge of EUR 752 million (USD 865.7 million) for the second quarter in connection with its Chinese equity-method investments.
"While we took a cautious view on China at the beginning of the year, market conditions have proved more challenging than expected," Chief Financial Officer Harald Wilhelm said in an earnings conference all. Since the Chinese market is much weaker than originally thought, he said the company has lowered its full-year sales guidance to "slightly below 2025 levels."
Ola Kallenius, the German company's chief executive, stressed, "We remain strategically fully committed to China" as a key part of the equation of global competition, which he acknowledged has "become tougher, especially in light of the Chinese … going global."
US carmaker Ford Motor last week announced it will sell roughly 30% of its factory in Valencia, Spain, <a title="" href="https://asia.nikkei.com/business/business-deals/geely-and-ford-team-up-to-revive-spanish-auto-plant" target="_blank" rel="noopener">to Chinese peer Geely</a>, effectively inviting another Chinese automaker onto European shores.
"At this stage in the game, the phenomenon is more on the volume market side, and more concentrated to specific markets," Kallenius said of China's inroads. However, he stressed that it is "not a reason to sit back and be relaxed, even if you have a very strong position like Mercedes-Benz."
"The Chinese ambition to broaden their footprint in Europe has only started," he added.
Ford CEO Jim Farley said in an earnings conference call on July 28 that the deal with <a href="/company/geely">Geely</a> "will bring speed and capital efficiency to our European operation." He did not talk about China beyond that, but instead complained about Japan and South Korea.
Rivals in those two Asian countries have an "extremely strong local supply chain" while enjoying a "huge currency advantage" but only "modest" 15% tariffs charged by America.
This article first appeared on <a href="https://asia.nikkei.com/business/automobiles/china-s-baic-motor-flags-loss-as-mercedes-benz-joint-venture-skids">Nikkei Asia</a>. It has been republished here as part of 36Kr’s ongoing partnership with <a href="https://www.kr-asia.com/nikkei-teams-up-with-36kr-in-asia-tech-news-coverage/">Nikkei</a>.
Note: EUR, RMB figures are converted to USD at rates of EUR 0.87 = USD 1 and RMB 6.77 = USD 1 based on estimates as of August 4, 2026, unless otherwise stated. USD conversions are presented for ease of reference and may not fully match prevailing exchange rates.

China's BAIC Motor flags loss as Mercedes-Benz joint venture skids