Chinese EV Investments Bring Little Business To Southeast Asian Suppliers, Economist Says
Local auto parts makers in Indonesia, Thailand and Malaysia face falling demand for combustion engine parts and barriers to Chinese EV supply chains.
Southeast Asia’s EV boom sidelines local car parts suppliers
Chinese EV investments have so far generated minimal business for established local component makers, according to Indonesian economist Bhima Yudhistira Adhinegara, as local manufacturers struggle to gain access to EV supply chains.
Falling demand, barriers to entry
Manufacturers across Indonesia, Thailand and Malaysia face a double squeeze as the region’s automotive industry shifts towards electric vehicles. Demand is weakening for components used in petrol and diesel cars, collectively known as internal combustion engine (ICE) vehicles.
At the same time, steep barriers to entry keep local suppliers out of EV supply chains, while Chinese carmakers favour their own networks.
Possible lifelines for suppliers
Analysts say repair and servicing work could offer a lifeline, alongside hybrids, which pair a petrol engine with an electric motor.
But they warn that, without stronger government support and better access to Chinese manufacturers, the EV transition threatens to hollow out the region’s established supply base.
Source: South China Morning Post
Frequently asked questions
How have Chinese EV investments affected Southeast Asian car parts suppliers?
Chinese EV investments have so far generated minimal business for established local component makers, according to Indonesian economist Bhima Yudhistira Adhinegara.
Why are local suppliers struggling during the EV transition?
Suppliers in Indonesia, Thailand and Malaysia face weakening demand for petrol and diesel vehicle components, steep barriers to entering EV supply chains, and Chinese carmakers’ preference for their own supplier networks.
What could offer a lifeline to local automotive suppliers?
Analysts say repair and servicing work, alongside hybrids that combine a petrol engine with an electric motor, could offer a lifeline.
What do analysts say is needed to protect Southeast Asia’s automotive supply base?
Analysts warn that stronger government support and better access to Chinese manufacturers are needed to prevent the EV transition from hollowing out the region’s established supply base.
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