Chinese EV maker Aion plans Indonesia plant, vying against rivals like BYD for slice of promising Southeast Asia market

Guangzhou-based Aion will partner with Indomobil Group, a carmaker based in Jakarta, to localise its production and supply chain
The third bestselling EV brand in mainland China after only BYD and Tesla plans to start production in Thailand this summer

Electric & new energy vehicles

Daniel Renin Shanghai

Published: 8:36pm, 3 Apr 2024

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Aion, an electric vehicle (EV) unit of state-owned Chinese company GAC Group, plans to build its second Southeast Asia plant in Indonesia, upping its stake in the potentially vast market against domestic rivals like BYD.

Guangzhou-based Aion will partner with Indomobil Group, a carmaker based in Jakarta, to localise its production and supply chain, offering Indonesian consumers a variety of intelligent new-energy vehicles, it said in a statement on Tuesday.

The third bestselling EV brand in mainland China after only BYD and Tesla, Aion did not provide details about the factory, such as investment size or capacity, but said the partnership with Indomobil would enable it to get involved in the finance, ride-hailing and distribution businesses in the local market.

“The tie-up with Indomobil means our dual assembly plan for the Southeast Asian market is finalised,” Aion said in the statement. “We will bring more options for the local EV market.”

02:55

Chinese EV maker BYD launches electric cars in Indonesia

The company’s first factory in Southeast Asia is expected to start operations in Thailand this summer when the first phase of construction is complete. It aims to have an annual capacity of 50,000 units after a second-phase expansion. Aion, founded in 2017 by GAC Group, the Chinese partner of Toyota and Honda, has yet to announce when construction on that phase will begin.

A clutch of Chinese EV assemblers have flocked to Southeast Asia to either build their own plants or sell their Chinese-made vehicles amid increasing demand for battery-powered cars.

The world’s largest EV maker BYD, mainland China’s largest sport-utility vehicle maker Great Wall Motor, the state-owned partner of Ford Motor and Mazda Motor Changan Automobile and EV start-up Hozon New Energy Automobile are setting up production facilities in countries like Indonesia and Thailand to build right-hand-drive cars for the region’s market.

03:11

Cheap EV alternative to Tesla and BYD takes off in small-town China

China, the world’s largest EV market, is crowded with more than 200 licensed EV makers of all shapes and sizes as competition escalates this year amid heightening worries about overcapacity. At present, six out of 10 new electric cars worldwide are sold in mainland China.

Major players have been accelerating their go-global drive since last year, with Southeast Asia emerging as a key overseas markets due to harsh stances on Chinese-made electric cars taken by authorities in the United States and Europe.

The European Commission launched an anti-subsidy investigation last September, and is seen as likely to impose tariffs higher than the standard rate of 10 per cent on Chinese-made electric cars.

12:53

‘Overtaking on a bend’: how China’s EV industry charged ahead to dominate the global market

The Biden administration is considering curbing imports of Chinese EVs, which Commerce Secretary Gina Raimondo described as a risk to US citizens because they collect a “huge amount of information about a driver”.

In Southeast Asia, car sales contracted by 2.1 per cent in 2023 to 3.36 million, from 3.43 million in 2022.

Aion’s sales of EVs to Chinese buyers increased 77 per cent last year to 480,003, compared with 2022. It also announced that it plans to start sales of Aion cars in Indonesia in June when two sport-utility vehicles, the Aion Y Plus and Hyper HT, are displayed at the Gaikindo Indonesia International Auto Show.

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