Chinese Premium Auto Brands Rise Strongly in Southeast Asia
(I) Southeast Asia’s Auto Market Landscape: From a “Japanese Backyard” to a “New Home Ground for Chinese Brands”
The most notable change in Southeast Asia’s auto market in 2026 is the strong rise of Chinese brands. In particular, in the high-end new energy vehicle (NEV) segment, they have already launched a full-scale counteroffensive.
The recently concluded 47th Bangkok International Motor Show in Thailand has become the best illustration of this transformation. Data shows that total vehicle bookings at the show reached 132,951 units, with Chinese brands surpassing Japanese brands in total bookings for the first time. Among the top ten brands by bookings, Chinese brands took seven spots—BYD ranked first with 17,354 units, ahead of Toyota’s 15,750. MG (10,537 units), Chery (7,509), Great Wall (6,819), and GAC (6,287) also made the list.
This breakthrough goes far beyond the outcome of a single auto show. For decades, Japanese automakers have dominated Southeast Asia, leveraging mature technology, well-established distribution networks, and strong brand heritage. Toyota, Honda, and Mitsubishi once accounted for over 90% of market share in key markets such as Thailand and Indonesia. According to Nikkei, Japanese car sales in six major Southeast Asian countries—including Indonesia, Thailand, and Vietnam—fell by 22% in 2025 compared to 2019, with Thailand dropping to 68%. Meanwhile, in January this year, Chinese brands’ combined market share in Thailand reached 47.34%, narrowly surpassing Japan’s 47.338% for the first time in history.
The once-called “Japanese backyard” is now becoming a “new home ground for Chinese brands.”
(II) New Energy Sector: China’s Overwhelming Dominance
The core driving force behind the rise of Chinese brands in Southeast Asia lies in their technological edge in the NEV sector. Chinese automakers have long invested in core electric technologies—battery, motor, and electronic control systems—gaining clear advantages over Japanese brands in driving range, charging efficiency, and intelligent cockpit systems, effectively achieving a “dimensional upgrade.”
According to the Federation of Thai Industries, Thailand’s EV sales reached about 120,000 units in 2025, up roughly 80% year-on-year, with Chinese brands accounting for more than 80% of the market. Even in the high-end segment, brands such as Zeekr, XPeng, and Avatr have each secured over 1,000 orders.
BYD stands as the leading player in this field. In 2025, combined registrations of BYD and its premium brand Denza in Thailand exceeded 50,000 units, a 90% year-on-year increase. From being a newcomer in 2022 to topping sales charts for three consecutive years, BYD’s performance reflects a fundamental shift in Thai consumer preferences. At the latest Bangkok Motor Show, BYD and Denza secured 18,000 orders, ranking first overall.
Notably, on March 25, 2026, Thailand’s Prime Minister Anutin, in response to rising global oil prices, chose to arrive at the Government House in a BYD Sealion 07 instead of the usual Rolls-Royce motorcade—an unmistakable endorsement of Chinese automotive capabilities.
Beyond technological strengths, rising oil prices and policy incentives have further accelerated the growth of Chinese brands. Since 2026, escalating tensions in the Middle East have driven up global oil prices, with diesel prices in Thailand exceeding 31 baht per liter, significantly increasing the cost of using internal combustion vehicles and amplifying the economic advantages of EVs. At the same time, Southeast Asian countries have introduced supportive policies: Thailand reduced excise tax on EVs to 2%, while Indonesia has implemented tax incentives to encourage local production.
More fundamentally, Chinese automakers have entered a new phase of “full industrial chain localization.” Unlike the earlier model of exporting finished vehicles, they are now establishing local manufacturing bases, strengthening supply chains, and expanding sales networks—evolving from “product export” to “industrial export.” By 2025, Chinese automakers’ planned annual production capacity in Thailand had surged to 550,000 units, not only meeting local demand but also supporting exports to neighboring countries, effectively avoiding import tariffs.
(III) Traditional Fuel and Commercial Vehicle Segments: Multi-Point Expansion
While the rapid growth of NEVs has drawn the spotlight, Chinese automakers’ efforts in traditional fuel vehicles and commercial vehicles are equally noteworthy. Unlike the “technological leapfrog” seen in NEVs, competition in these segments resembles a prolonged “positional battle,” where Chinese brands are gradually breaking into markets long dominated by Japanese players through flexible localization strategies, differentiated positioning, and long-term investment.
One of the most successful approaches is Geely’s “Proton model.” In 2017, Geely acquired a 49.9% stake in Malaysia’s national car brand Proton, initiating comprehensive empowerment in technology and management. Proven models such as Binyue, Boyue, and Emgrand were introduced into Malaysia under Proton branding as the X50, X70, and S70, achieving localized market penetration. With Geely’s technological support, Proton has secured its position as the No. 2 brand in Malaysia with monthly sales of 19,800 units. Its EV model E.MAS 5 (a sister model of Geely Xingyuan) even entered the top five monthly best-selling models with over 3,000 units, becoming the first EV to achieve such a milestone.
Thailand, known as the “Kingdom of Pickup Trucks,” sees pickups account for around 50% of its market. Previously dominated by Toyota’s Hilux, this segment is now being challenged by Chinese brands. Great Wall Motor has introduced both EVs and hybrid solutions, including HEV and PHEV strategies under its Haval brand. Its Tank 300, tailored to Thailand’s diesel-favoring market, has achieved strong performance. Additionally, HEV pickup models have been launched to meet local usage habits. At the 2026 Bangkok Motor Show, Geely’s Riddara brand impressed with its full lineup of electric pickups, securing 1,160 orders within just seven days.
FAW Group also plays a key role. Its Hongqi brand has adopted a premium-first strategy, using Singapore as a gateway to Southeast Asia. Meanwhile, FAW Jiefang has focused on localized production in Indonesia. In February 2026, its first locally assembled LN 4×4 truck rolled off the line, marking a major milestone. In March, a strategic agreement for the purchase of 1,000 trucks was signed with a local industrial park, further strengthening its market position.
(IV) Challenges Remain
Despite the rapid rise of Chinese brands, several challenges remain for sustained long-term success.
First is policy uncertainty. EV policies across Southeast Asia are still evolving. Thailand’s EV 3.5 policy has significantly reduced subsidies—from 100,000 baht per vehicle in 2024 to a maximum of 50,000 baht after recent adjustments, while import taxes have risen back to 10%. Stricter localization requirements have also been introduced, requiring manufacturers to produce two vehicles locally for every one imported in 2026, increasing to three in 2027.
Second is the counterattack by Japanese automakers. Toyota, Honda, and others are accelerating electrification, engaging in fierce competition through pricing and service strategies.
Third is the long-term challenge of brand premium. Compared to Japanese brands, Chinese automakers still lag in brand heritage and after-sales service networks. Converting their “high-tech” image into lasting brand loyalty remains a key issue.
Conclusion
Competition in Southeast Asia has evolved from simple product exports to comprehensive competition encompassing products, technology, branding, production capacity, and industrial ecosystems. This transformation—from “cost-effectiveness” to “high technology and premium quality”—marks a pivotal chapter in the global expansion of China’s automotive industry.
