BYD’s Inventory Surge Sparks Price Cuts Amid Competitive Market
In a move raising eyebrows across the automotive sector, BYD has initiated significant price cuts due to a substantial inventory increase at its dealerships. According to Deutsche Bank, led by analyst Wang Bin, the inventory swell hit approximately 150,000 units in the year’s first four months, almost equal to half a month’s retail sales.
Deutsche Bank’s analysis reveals that “BYD’s inventory level stands at approximately three to four months’ supply,” which appears to be a threshold for dealers. This stockpile is linked to BYD’s ambitious sales target of 5.5 million units in 2025—a 30% rise from the previous year—while actual retail sales climbed only 15% year-on-year during the same period.
The bank also indicated that BYD’s novel “God’s Eye” autonomous driving system has not met expected order volumes, contributing to sluggish sales. The analysts foresee that BYD’s pricing strategy might trigger heightened competition, with rivals potentially slashing prices as well.
Challenges Facing China’s EV Industry
Wei Jianjun, Chairman of Great Wall Motors, expressed concerns about the sustainability of China’s auto industry, likening its risks to the “Evergrande” crisis that shook the real estate sector. He criticized the current environment, describing it as unhealthy due to ongoing losses and fierce price competition, which has strained the supply chain.
Wei highlighted suppliers’ struggles under price cuts and payment delays, accusing some manufacturers of compromising on safety and reliability.
Thailand’s EV Market: Boom and Subsequent Hurdles
Thailand’s electric vehicle (EV) market witnessed a dramatic rise in 2023, with registrations soaring to 76,000 units from under 10,000 the previous year. This growth was fueled by government incentives and the ASEAN-China Free Trade Agreement, benefiting Chinese brands with tariff-free imports.
However, the momentum slowed in 2024, with registrations falling by 8% to approximately 70,100 units. Industry insiders suggest that the rapid expansion led to overestimation of market disruption by EVs, resulting in excessive stock and flawed strategic planning.
Stabilizing the Market Through Price Adjustments
Amid surplus inventories, the market is now tasked with offloading excess stock, possibly through more price reductions. Analysts predict only modest growth in the near term.
Saroj Ma-Ajlert from Mitsubishi Motors Thailand noted that although EV popularity persists, growth has moderated. Brands are exploring diverse marketing strategies, such as auto shows, to boost sales. Yet, overall market share remains largely unchanged.
Phongsak Lertrudeewatthanawong of MG Sales Thailand mentioned that the EV market share is currently around 13-14%. To expand further, substantial changes in market dynamics are necessary to persuade hesitant consumers to adopt EVs.
After-Sales Service: A Critical Factor
Phongsak emphasized that inadequate after-sales service is a significant barrier to EV market growth. Common complaints include the unavailability of parts and lengthy repair times, which undermine consumer trust. Addressing these issues could provide a competitive edge for companies.
This situation underscores the need for balanced planning between sales and parts supply, especially for rarely replaced components. Persistent after-sales challenges could further dampen the EV market outlook.
Impact of China’s Price War on Thailand’s Market
Despite the buzz around China’s aggressive price cuts, their direct impact on Thailand’s EV market remains limited. Globally, EVs, including those in China, are still more expensive than internal combustion engine (ICE) vehicles. Thailand distinguishes itself by offering EVs at lower prices than ICE vehicles.
While prices in Thailand have stabilized after aggressive discounts during recent motor shows, price competition might still arise as part of broader market dynamics. Differences in production and sales volumes between Thailand and parent companies in China suggest that Thai subsidiaries might experience limited repercussions from Chinese price wars.
FTI’s Perspective on Market Dynamics
Surapong Paisitpattanapong from the Federation of Thai Industries commented on the intense EV price war in China, attributing it to market saturation and fierce competition for market share. He noted that oversupply has led companies like BYD to reduce prices, putting pressure on competitors like Tesla.
Despite price cuts, Thailand’s EV production supports Chinese brands’ growth, as consumers prioritize model design, brand reputation, and technology. BYD, for example, produced 660 units domestically in April 2025, aligning with production offset requirements under government policies.
Surapong concluded that manufacturers must leverage financial endurance and strategic investments to remain competitive. Success hinges on gaining consumer preference through superior after-sales service, parts availability, and customer support.
Original Story at www.nationthailand.com