ASEAN Chinese Car Buyers Are Rising But Are There Enough Buyers To Take In All The Units

Chinese automakers are now manufacturing vehicles within ASEAN for domestic sales, supply-chain localisation and potentially exports to other markets.

Fact, new car factories from Chinese brands like BYD, Chery, Jaecoo, Wuling, Geely, Great Wall Motor and SAIC are being established faster than ASEAN buyers can absorb their production output. 

According to recent International Energy Agency’s (IEA) Global EV Outlook 2026 report, Chinese BEV plants were operating at around 20% of capacity in Thailand and less than 15% in Indonesia.

Meanwhile, Chinese brands continue to expand across ASEAN. In 2025, South-East Asia accounted for more than half of Chinese automakers’ overseas manufacturing footprint, according to the IEA report. 

Increased deliveries to the region were also considered one factor behind a 21% increase in China’s finished-vehicle exports, which reached 7.1 million units in 2025, compared with 5.86 million in 2024.

Indonesia and Thailand have seen a significant increase in Chinese automotive businesses over the past five years, according to GlobalData’s ASEAN Automotive team. Indonesia had three Chinese brands like MG, DongFeng and Wuling in 2021, compared with 22 in 2026. Thailand similarly increased from three brands which were MG, Haval and Ora to 23 over the same period.

The increase in investment reflects ASEAN market conditions and changes in China’s automotive industry and fresh requirements from ASEAN governments for local assembly to meet labour and vendor expansion.

“China itself has become intensely capacity-rich and brutally competitive,” said an executive of a consultancy firm.

Chinese automakers are seeking international growth, while globalisation is increasingly involving local production. “I describe this as a shift from ‘exporting from China’ toward ‘producing in the market, for the market’. ASEAN is one of the first places where we can see that transition occurring at scale,” the executive said.

Chinese automakers have established almost 1 million vehicles of annual manufacturing capacity across South-East Asia, more than half of their 1.7 million-unit overseas footprint, according to the IEA. However, utilisation remains below capacity.

“We have observed that almost all Chinese automakers are not meeting their sales targets, which has led to a reduction in their production plans,” said an executive from a market research firm. Weak demand in some markets and the increasing number of Chinese automakers are affecting sales.

Russo said current overcapacity is partly the result of Chinese automakers establishing manufacturing capacity ahead of market demand, although this does not necessarily mean the investments were based on inaccurate forecasts or poor decisions. “I would not judge these investments solely on today’s utilisation rates,” Russo said, adding that some plants will face difficulties because too many brands are competing for limited near-term demand and that consolidation is inevitable.

For Chinese OEMs, current utilisation rates do not necessarily determine the longer-term rationale for ASEAN production. Investments are intended to secure market access, meet localisation requirements and establish manufacturing bases that can expand as demand develops.

“Collectively, ASEAN will become an important production base for Chinese automakers,” the consultancy executive said.

Indonesia and Thailand are attempting to address overcapacity through local-content and production regulations, an executive at an automotive market research firm noted. “For example, in Thailand, the government has a 1:2 to 1:3 import-to-local-production ratio. In Indonesia, the ratio is 1:1,” the executive said.

He added that Thailand’s National Electric Vehicle Policy Committee is considering higher excise taxes on EVs that do not use domestic components, as the country attracts hundreds of new projects. Indonesia’s finance minister has announced tax discounts and waivers on new EV purchases.

“These regulations are fairly recent or are being decided on, so although they could improve utilisation by stimulating demand and requiring more vehicles to be produced domestically in each country, it will take time for them to have an impact,” the executive said.

Domestic sales are only part of the strategy. If ASEAN becomes a larger production base, Chinese automakers could use it to supply markets outside the region.

“ASEAN gives manufacturers access to a large regional market and, depending on rules of origin and trade agreements, potentially to markets beyond Southeast Asia,” the consultancy executive said. Thailand already has an established automotive manufacturing and export ecosystem, while Indonesia offers the strategic advantage of being deeply integrated into the battery-material value chain.