Twenty-one of the 29 brands that joined this year’s edition of the Manila International Auto Show were from China. In 2023, the event drew 18 Chinese brands.
At the Bangkok Auto Show, the story was no less different. Because jostling for space against the established Japanese, American and European brands were Chinese automakers, which markedly crowded the exhibition floor with their models. And just as conspicuous were their numerous New Energy Vehicles (NEV) offerings, cars that are fully electric, or propelled in notable part by electric power.
Well, 75% of NEV deliveries in Southeast Asia during the first quarter of the year came from Chinese automakers, news agency Reuters quoted Counterpoint Research in its report. Of the total NEV sales, Thailand snapped up 79%.
This is significant. Thailand is regarded as the “Detroit of Asia.” If you have a bit of interest in cars (if not of a certain age), you would get the reference. Thailand not only leads Southeast Asia in vehicle sales, it also builds the largest number of vehicles, chiefly sold to neighbors, in the region.
The interest on the region is not surprising. Southeast Asia hosts a huge population that is mostly young, ensuring growing consumption and a steady labor force for decades to come. It is poised to become the world’s fourth-largest economy by 2030. Besides other factors, like increased digital inclusion and participation, also seen to drive growth in the region is its burgeoning electric vehicle sector. Without doubt, and in contrast to a declining Europe, this corner of Asia is on full bore.
Chinese NEVs are not the only ones igniting the region. Deliveries of China’s conventional engine-propelled cars are also picking up speed. Especially in markets where the uptake of electric vehicles is not as brisk yet.
Take the Philippines, for example.
Granted, Chinese brands currently make up a small chunk of the Philippines’ auto sector, dominated by Japanese companies. From January to May this year (the latest data available as of this writing), Chinese cars collectively accounted for only 5.6% in the total deliveries reported by member companies of the Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMPI) and the Truck Manufacturers Association (TMA).
The share, composed of both NEVs and combustion cars, is slightly up from the 4.1% seen during the same five-month stretch in 2023. But note that some of the Chinese companies were not yet operating in the country at the time, or were not members of the industry groups then (and, hence, made no disclosures). Still, there are others that have yet to join CAMPI and TMA, too.
In any case, the Chinese brands’ combined total hardly makes a dent now, right? Well, if a report showing a rising acceptance of Chinese cars is any indication, then this is likely to change in the years ahead.
Communications firm Vero, in a 2023 white paper on consumer perceptions and market opportunities for Chinese automakers in Southeast Asia, found consumers in the region are, more than ever, now open to buying Chinese cars. Vero noted this is because these consumers from Thailand, Indonesia, Vietnam and the Philippines appear to have better perceptions about Chinese companies, a trend that has consistently improved in the last four years.
The Vero report, which in lieu of surveys used social listening — a way to find out what consumers are saying publicly at a given time — showed certain key attributes of Chinese brands have fared well in sentiment score, basically a measure of how consumers feel about a brand or product. Consumers’ perceptions, as indicated in the sentiment score, were then classified into three types of responses; positive, neutral, and negative.
In Vero’s findings, already considered as low scores were those observed from Vietnamese and Indonesian consumers, of which 69% of the former and 66% of the latter regard Chinese cars on a positive note. But both countries have higher percentages of consumers who are neutral. Given the upward trend in acceptance seen in recent years, then their positive scores are more likely to rise rather than drop.
Interestingly, Thailand and the Philippines have exactly the same sentiments. The Vero report found a full 72% of consumers in the two countries have positive perceptions of Chinese cars, with 20% of them staying neutral, and only 8% viewing the models negatively. Both the Thais and Filipinos are drawn to Chinese cars’ competitive pricing, advanced technologies and features, and innovative designs.
In listening to consumers’ online conversations about their interest and preferences, Vero found Filipinos put necessity and convenience as the top reason in buying a car. Citing how bad traffic is in major cities, Filipinos, the report said, do consider the car as “an essential tool in life.” Listed as the top barrier, meanwhile, are the costly expenses associated with owning and operating a car.
“Fortunately… affordable Chinese cars make average Filipinos’ aspirations of car ownership more feasible,” Vero said.
Whether such aspirations would actually bring Filipino consumers to showrooms — and, more important, get them to drive off with a car — may not be guaranteed. But results prove a number of them already have. That they are increasingly receptive of Chinese brands can only mean more will soon follow.