The Thai government has launched an investigation into the pricing practices of Chinese electric vehicle (EV) manufacturer BYD, following consumer complaints about dramatic price cuts that have disrupted the market and angered recent buyers.

Background and Initial Complaints

The controversy began when BYD dealers in Thailand offered substantial discounts on their EVs, leading to significant price reductions. Customers who had purchased vehicles at higher prices prior to the discounts felt misled and expressed their dissatisfaction on social media. Some buyers claimed they were informed that prices would increase, only to see them slashed further shortly after their purchases. For instance, one customer reported buying a BYD Atto 3 for 1.19 million baht, which was later sold for 859,000 baht.

Government Response

Prime Minister Srettha Thavisin has called for fair pricing practices to protect local consumers while the Office of the Consumer Protection Board (OCPB) has initiated a probe into the aggressive discounting practices by BYD dealers. The investigation aims to determine whether these practices constitute unfair business conduct and to address the grievances of the affected customers.

BYD Response

BYD has later responded to the Thai government's demands for fair pricing in several ways:

Assurances from CEO: During a meeting with Thai Prime Minister Srettha Thavisin, BYD's Chief Executive Wang Chuanfu assured that future pricing strategies would be fair. He committed to implementing appropriate pricing going forward.

Support for affected customers: Wang promised that BYD would seek ways to support customers who were adversely affected by the recent price cuts. This indicates an acknowledgment of the issue and a willingness to address customer concerns.

Commitment to the Thai market: Wang emphasized BYD's commitment to the Thai market, highlighting the company's investment in a local factory that produces car parts and employs new technologies. This suggests a long-term approach to building trust in the market.

No immediate public comment: BYD officials in Thailand and its exclusive distributor, Rever Automotive, did not immediately comment on the situation when approached by news outlets. This silence could indicate that the company is carefully considering its next steps.

Compensation: As of now, BYD has not announced a formal compensation plan for affected consumers. The situation appears to be evolving, with pressure from consumer groups and government agencies potentially influencing BYD's future actions regarding compensation.

Ongoing investigation cooperation: While not explicitly stated, BYD appears to be cooperating with the investigation launched by the Office of the Consumer Protection Board (OCPB) into the aggressive discounting practices.

Despite these responses, it's worth noting that the Thai government is continuing its investigation into BYD's pricing practices. The effectiveness of BYD's response and its impact on consumer trust and market position in Thailand remains to be seen.

BYD's Market Position and Expansion

Despite the controversy, BYD remains a dominant player in Thailand's EV market, holding a 46% market share. The company has recently inaugurated its first Southeast Asian factory in Rayong, Thailand, with a production capacity of 150,000 vehicles per year. This facility is expected to reach full capacity within two years and will serve as a production hub for exporting EVs to ASEAN and other countries.

Economic and Industry Impact

Thailand has set an ambitious goal for 30% of its vehicle production to be electric by 2030. The country has attracted over $1.44 billion in investment from Chinese EV manufacturers, including BYD, through government subsidies and tax incentives. BYD's investment in Thailand is seen as a significant step towards achieving this goal and driving the development of the new energy vehicle industry in the region.

Conclusion

The Thai government's investigation into BYD's pricing practices highlights the challenges and complexities of managing consumer expectations in a rapidly evolving market. While BYD's aggressive pricing strategy has helped it capture a significant market share, it has also led to consumer dissatisfaction and regulatory scrutiny. The outcome of this investigation will be crucial in shaping the future of EV pricing strategies and consumer protection measures in Thailand.