Collaborate with Chinese EV makers or suffer, Thai automotive firm CEO warns
The CEO of Thailand’s largest listed automotive parts supplier, Aapico Hitech, warns that collaboration with Chinese EV makers is essential for survival in the long term. Yeap Swee Chuan highlights that Chinese rivals offer lower costs and superior technology, disrupting a market previously dominated by Japanese firms. This shift is not unique to Thailand, where the automotive sector, accounting for 12% of GDP, is experiencing a crisis due to Chinese competition and domestic factors like political instability and limited government support. Yeap predicts a “new type of globalization” where established giants must adapt, and smaller companies will supply parts globally, driven by the rapid reordering of the industry by Chinese EVs.
This news item underscores a critical inflection point for Asia’s automotive sector, particularly in Southeast Asia, where Chinese EV manufacturers are rapidly gaining market share. The CEO’s warning to collaborate or suffer highlights the intense competitive pressure on traditional players, especially those with an “ICE brain” mentality, as Chinese firms, starting with an EV-first approach, demonstrate advanced electronics and cost efficiencies. This dynamic is reshaping supply chains and forcing established companies, including Japanese giants like Honda, to re-evaluate their strategies and embrace partnerships.
The implications for Asia’s tech ecosystem are significant. The rise of Chinese EVs is accelerating the adoption of electric vehicle technology across the region, as seen in Thailand and Indonesia. This shift is creating new opportunities for tech innovation in areas like battery technology, charging infrastructure, and in-car electronics. However, it also poses challenges for local industries, as foreign investment from China, while bringing capital and jobs, can displace some domestic companies. The “new type of globalization” predicted by Yeap suggests a more interconnected and specialized supply chain, where regional tech firms must adapt to become global suppliers for a diverse range of manufacturers.
