The local electric vehicle market will continue to grow rapidly, driven by more investment from Chinese EV makers in Thailand, causing manufacturers to cut prices to attract consumers, according to major car companies.
"A price war has occurred in the Thai market," said Narong Sritalayon, managing director of Chinese auto maker Great Wall Motor (GWM).
He was speaking ahead of the Bangkok International Motor Show, slated to start on Wednesday, which will highlight various EV models.
GWM has already opened its EV plant in Rayong, which is ready to compete with other manufacturers who also plan to build production facilities in Thailand.
Competition in the domestic EV market is expected to intensify as the number of EVs in the market, especially from Chinese manufacturers, keeps growing.
Thai-Chinese joint venture SAIC Motor-CP, manufacturer of MG cars, also believes this situation can lead to a price war among manufacturers.
"Some Chinese companies are using multi-brand marketing in Thailand, but MG will market its cars through a single brand," said Pongsak Lertruedeewattanavong, vice-president of MG Sales Thailand.
"We are confident we can deal with a price war."
SAIC Motor-CP will today open its battery electric vehicle (BEV) factory in Chon Buri, joining other Chinese auto makers who are using Thailand as a new EV production base.
"We plan to deliver 1,000 BEVs a month to customers," he said, adding that the company will first produce the MG4, which is a rear-wheel drive EV.
MG is committed to making EVs domestically after joining the government's EV3.0 scheme, an incentive package comprising subsidies and tax cuts, aimed at promoting EV consumption and production in the country.
Participating companies are required to produce EVs in Thailand starting from 2024.
Omoda & Jaecoo (Thailand) Co, a subsidiary of Chery Automobile, a Chinese state-owned EV manufacturer, earlier announced it plans to build an EV factory in Rayong, with production set to start next year.
The company has set a sales target for the Omoda EV5 and Jaecoo7 at 6,000 units this year.
More Chinese EV imports together with banks' stricter criteria in granting car loans are expected to affect domestic production of internal combustion engine-powered cars, the Automotive Industry Club of the Federation of Thai Industries said earlier.
More restricted access to car loans will deal a blow to domestic sales of pickups, but this should not affect sales in the passenger car and sport utility vehicle (SUV) categories, said Mr Pongsak.
He believes the purchasing power of prospective buyers of passenger cars and SUVs remains strong.