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Thailand’s auto family backs China BYD’s rise in kingdom

Written by Nikkei Asia Published on   5 mins read

Japanese and South Korean carmakers are threatened by the Chinese brand.

Rever Automotive, headed by a member of the family that owns Thailand’s well-known Siam Motors Group, has become the exclusive dealer for BYD, giving the Chinese electric vehicle maker an edge to take over the lion’s share of the Thai EV market. The rise of this relatively obscure startup poses a serious threat to Japanese and South Korean automakers in the country.

To rival the Japanese, Rever has introduced an ambitious dealership strategy and unique sales approach. Already, some dealers have switched from selling Japanese brands to BYD.

On October 5, Thai Prime Minister Srettha Thavisin test-drove BYD’s Seal electric sedan at the Office of the Prime Minister. Although Srettha said he did not “intend to promote the manufacturer,” it was symbolic that the car was a Chinese-made EV, not a Japanese one.

BYD has been steadily gaining momentum in the Thai market. Its share of new vehicles sold in August reached 3.7%, overtaking Japanese makers Mitsubishi Motors, Mazda Motor and Nissan Motor. According to Autolife Thailand, an automotive website, BYD’s electric vehicle sales in the first eight months of this year totaled about 14,700 units, representing 34% of overall electric vehicle sales—the biggest share in the market.

Thailand has the second-largest auto market in Southeast Asia, with annual new vehicle sales totaling some 900,000 units. In August alone, EVs comprised about 11% of total vehicle sales in the country. The 9-percentage point increase from the same month a year ago was driven by BYD. Its Atto 3 SUV is the bestselling EV in the market and is particularly popular with Bangkok’s wealthy thanks to a government subsidy of THB 150,000 (USD 4,100), its reasonable price and advanced features.

In mid-September, BYD announced a new EV customer reward program in Thailand that will be rolled out as early as 2024. The program allows customers to gain carbon credits, which are calculated based on the distance traveled and which can be used to get discounted charging fees. BYD claims it is the first program of its kind in the world.

Despite the program’s uniqueness, executives of BYD’s Thai subsidiary had relatively few words to say at the news conference unveiling the program. Instead, the announcement was led by Rever Automotive CEO Pratarnwong Phornprapha, who is believed to have played a key role in introducing it.

Although its name recognition remains low, Rever is run by the founding family of the Siam Motors Group.

Established in 1952, Siam Motors took advantage of the government’s initiative to support the growth of the domestic automotive industry, starting with the import and sales of Nissan vehicles. It then began assembling Nissan models. In addition to having stakes in Nissan’s production and sales subsidiary in Thailand, the group has joint venture companies with Japanese automotive component makers, including battery maker GS Yuasa, hydraulic equipment maker KYB and bearing maker NSK.

“It’s not as large as Charoen Pokphand Group, but it’s an established conglomerate and has strong ties with the royal family,” said MU Research and Consulting (Thailand) Managing Director Kazuki Ikegami, an expert on Thai companies. “It also has deep ties with Japanese companies.”

And managing Siam Motors is the Phornprapha family. The company, which has been called “Thailand’s automotive king,” is currently led by Phornthep Phornprapha, one of the founder’s sons. Forbes estimates the assets of Phornthep Phornprapha and his family at USD 1 billion, making them one of the wealthiest families in Thailand.

Rever CEO Pratarnwong is the next generation of the Siam’s Group’s founders and a nephew of Phornthep, making Pratarnwong a third-generation leader. He also is an executive at a Siam Motors subsidiary.

“We are completely independent from Siam Motors,” Pratarnwong said of Rever in an interview with Nikkei. He said this is presumably because Siam Motors, due to its agreements with Nissan and other Japanese partners, cannot as a group support rival BYD. The situation may have an impact on Siam Motors’ partnerships with Japanese parts makers.

But an executive of a major Japanese automaker said, “It’s clear the Phornprapha family itself is supporting BYD.” In fact, Pratarnwong is not the only member of the family who is a Rever executive.

“A Siam Motors executive has said the company aims to make EVs one of its core businesses in the future,” said Yuto Ikeuchi, an associate at MU Research and Consulting (Thailand). “I’m guessing the company regards Rever as a potential partner.”

Currently, Rever is stepping up efforts to open new dealerships.

Recently, a BYD dealership in Bangkok’s Bang Khen district, a 30-minute drive from the city center, was crowded with customers waiting to place orders for new cars even though it was a weekday morning. Flagship models were on display and the service center in the back was busy. Also lined up were many cars that appeared waiting to be delivered.

This dealership previously handled the Suzuki brand before switching to BYD in November 2022. “We began selling Suzuki cars six or seven years ago, but their sales have slumped since a few years back,” according to a person at a sales company that operates BYD dealerships in Bangkok, including the one in Bang Khen. “Sales have been better since we switched to BYD. It’s no contest.”

An executive of a Japanese automaker’s Thai subsidiary said Rever is “targeting what is known as ‘Tier 2’ brands.” Suzuki and Mazda are Tier 2 brands due to their smaller sales volume compared to Tier 1 brands, which include Toyota Motor, owner of the largest overall market share in Thailand, and Isuzu Motors and Honda Motor, whose shares rank second and third, respectively. Rever is pushing dealerships of Tier 2 brands to switch to BYD, according to the executive.

In fact, a Mazda dealership in a Bangkok suburb switched to BYD and dealerships selling cars from South Korea’s Hyundai Motor, which has a small footprint in Thailand, have also switched to the Chinese brand.

Switching to BYD has advantages for dealers. In Thailand, car dealerships typically pay on a commission basis, in which sales staff are paid better for selling more. “I think many dealerships and their staff actually want to switch to popular brands like BYD,” a member of a Toyota sales team in central Bangkok said.

Rever plans to increase the number of BYD dealerships threefold to 200 by the end of 2024. For the Thai government, which wants EVs to comprise 30% of all new car sales by 2030, the Rever-BYD tie-up has been welcome news.

Meanwhile, Rever is gradually chipping away at established Japanese automakers using Siam Motors know-how—knowledge that was acquired through years of dealing with Japanese makers. The upshot is that Thailand’s automotive industry, which has long been dominated by Japanese companies, now stands at a major crossroad.

This article first appeared on Nikkei Asia. It has been republished here as part of 36Kr’s ongoing partnership with Nikkei.


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