Chinese firm targets luxury car segment
Domestic premium car sales plunged by 30% year-on-year during the first half amid the economic slowdown and intensifying competition, fuelled by more Chinese electric vehicles entering the Asian market as a result of the impact of the US-China trade war, says Zeekr Intelligent Technology, a Chinese EV maker under the Zeekr brand.
The company, owned by Geely Automobile Holding, raised the concern as it plans to market its Zeekr X compact electric sports utility vehicles, targeting motorists in the luxury car segment.
Premium car sales in the country, including EVs and internal combustion engine-powered cars, stood at 17,000 units during January and June, though buyers were believed to have a high level of purchasing power.
Bao Zhuangfei, head of Zeekr’s Southeast Asia region, attributed the drop to Thailand’s sluggish economy, causing people to be more cautious about spending and banks’ stricter criteria granting auto loans.
In 2023, sales in the premium car segment tallied 50,000 units as the country was not severely affected by the economic downturn and weak consumer purchasing power.
“The Thai economy is not healthy, compared with those of Malaysia, the Philippines and Indonesia,” he said.
“This is a tough time for businesses, including car manufacturers and sellers.”
Added to these unpleasant economic circumstances is the growing reluctance of insurance firms to offer EV insurance because the fluctuating market prices of new and used EVs make it difficult for companies to set insurance premiums.
A large cut in EV prices by some companies has led to a price war, which also caused people to delay their car purchase decisions.
Zeekr will not resort to the price-cutting tactic because this approach could damage the reputation of Chinese EVs and erode consumer trust in Chinese brands, said Mr Bao.
Chinese EV manufacturers are currently under sales pressure after the European Union announced it plans to impose increased duties of up to 38% on imported Chinese EVs starting this month, according to media reports.
The move is viewed as protectionism by Beijing, which also faces an upsurge in the US tariff on its EVs after Washington quadrupled the rate to 100%.
The situation had caused Chinese EV makers to focus their sales in Asia, including Thailand.
Chen Yu, Zeekr’s vice-president, said the company is eager to sell EVs in Thailand because the EV market is growing rapidly, following the state EV promotion policy.
If Zeekr EVs receive a good response, the company will consider building an EV factory in Thailand, he said.
Zeekr set a target to sell 2,000 cars domestically within this year.