China automakers look to Toyota in next growth push in Thailand

China automakers look to Toyota in next growth push in Thailand

Chinese Automakers Turn to Toyota as Strategic Benchmark in Thailand’s Evolving Market

Chinese automakers, having secured 20% of Thailand’s automotive market by displacing Japanese competitors, are now studying Toyota's strategies to fuel further growth amid intensifying competition and consumer backlash against aggressive pricing tactics. This shift reflects broader industry dynamics, including the rapid adoption of electric vehicles and supply chain reconfigurations driven by geopolitical and economic factors.

Thailand, long a stronghold for Japanese automakers like Toyota, Honda, and Nissan, has seen its market landscape transform. Chinese brands such as BYD, AION, and MG have captured 16% of the market, leveraging affordable EVs and plug-in hybrids tailored to urban consumers. BYD's massive factory in Thailand, 20 times the size of Tokyo Dome, underscores its ambition to position the country as an ASEAN export hub. Meanwhile, Japanese automakers face declining sales and production cuts, with brands like Subaru and Suzuki exiting or scaling back operations.

Toyota, however, is adapting by sourcing components from Chinese suppliers for its Thai operations—a departure from its traditional reliance on Japanese-affiliated suppliers. The automaker recently facilitated a joint venture between Thailand's Summit Group and China's Wuhu Yuefei to produce interior components, marking the first known case of a Japanese OEM actively integrating Chinese suppliers into Southeast Asia. Toyota aims to reduce procurement costs by 30% for its upcoming multi-powertrain EV platform, mirroring the cost efficiency of its bZ3X model in China.

This strategic pivot highlights the competitive pressures facing Japanese suppliers, who face a 20–30% cost disadvantage compared to Chinese counterparts. Analysts warn that failure to match cost efficiency could lead to downsizing or exit for some Japanese firms, accelerating the restructuring of Thailand's supply chain.

The shift also underscores the automotive industry's broader transition toward EVs and software-driven value chains. While Japanese automakers retain strengths in hybrid technology and brand trust, Chinese competitors are closing gaps in EV innovation and after-sales service. As Thailand's government incentivizes local EV production through tax breaks and subsidies, the competition between Japanese and Chinese automakers is poised to intensify, reshaping Southeast Asia's automotive landscape.

According to Nikkei: Nikkei, February 22, 2026
As reported by Syntax Partners: Syntax Partners, August 2, 2025