Now's as good a time as any to buy China-made cars

Free Malaysia Today

a day ago

Now is a good time for people in Malaysia and Southeast Asia to buy Chinese cars. They offer good value for money, being about 30% cheaper than equivalent legacy car models, and are packed with features previously only offered in cars from premium brands that cost twice as much.
However, the main disadvantage of Chinese cars is that they lack the legacy enjoyed by the 150-year old Mercedes Benz or Peugeot, or even the 118-year old Toyoda loom company which preceded the 88 year-old Toyota Motor Corporation.
To overcome that fear of the unknown, Chinese car makers who began global exports only about 10 years ago started with gimmicky but nevertheless mind-boggling vehicle warranties, such as a million kilometres for their internal combustion engines.
While that phase is over, many Chinese EV makers still offer an outstanding eight-year 160,000km powertrain warranty covering electric motors, inverter and related drivetrain components to emphasise confidence in their core EV technology.
Coming back to my main point, it's very simple. Malaysian and Southeast Asian car buyers are benefiting from China's industrial policy, which includes broad infrastructural subsidies for the car industry from the central government.
On another level, many provincial governments in China compete in car manufacturing output to gain brownie points with the central administration.
They provide incentives to the respective companies, such as export sales subsidies. It's understood that these export sales incentives can reach as much as RMB14,000 (RM7,800) per car.
But it's not just subsidies that make China's cars cheaper than their legacy counterparts.
China's automotive industry has emerged as a global leader in technological advancement. As a benchmark, its use of robotics has outstripped legacy car firms, significantly influenced by government policies and subsidies.
The country's strategic approach has enabled various manufacturers – from state-owned giants such as Shanghai Auto (SAIC) and Beijing Auto (BAIC) to privately-held enterprises like BYD, Geely, Chery, and GWM – to thrive in a competitive market.
Central to the Chinese government's policies is the 'Made in China 2025' initiative, which aims to elevate domestic manufacturing, particularly in high-tech sectors, including automotive production.
This initiative seeks to reduce reliance on foreign technology, ensuring that Chinese carmakers can innovate and compete domestically and internationally.
Moreover, Beijing's policies have focused heavily on promoting EVs both to improve energy security as well as to reduce carbon emissions.
Subsidies for EV manufacturers have been generous; for instance, substantial financial incentives are provided to consumers purchasing electric cars, which in turn propels sales and encourages manufacturers to invest in research and development.
These measures have resulted in a dramatic increase in EV production, placing China at the forefront of the global market.
State-owned firms like SAIC Motor and Dongfeng Motor benefit from government backing and preferential access to funding, enabling them to invest in large-scale production facilities and enhance their technological capabilities.
These companies can navigate the complex regulatory environment more effectively than private firms due to their established connections and resources.
On the other hand, private companies like BYD, Chery, and GWM have leveraged the supportive environment fostered by government policies to carve significant market share.
BYD, for instance, has emerged as a leader in EVs and is iconic for its integrated supply chain, which includes battery production, rare earth supplies and its own record-setting 7,000 car capacity ocean-going car carriers.
China also made an unprecedented concession for Tesla, the world's leading EV innovator, allowing it the distinction of being the only 100% foreign-owned company permitted to manufacture its cars in China.
The objective was to galvanise domestic Chinese EV makers to improve their cars to world-class status in competing with Tesla.
Beijing's alignment with sustainable development goals has facilitated Tesla's growth, with subsidies for EV purchases benefitting its sales. Additionally, the cooperation between Tesla and local suppliers has allowed it to optimise its supply chain while adhering to local regulations.
As a result, the price of Tesla cars in Malaysia are the cheapest in the world, after Shanghai, where the Tesla Model Y is made.
Note: I'm not one to refuse subsidies and, after some budgeting, I've bought my first Chinese car, an EV, for RM100,000.
Out of the more than 50 cars that I've owned in my lifetime, this is only my second new car. The first was a Toyota Prius hybrid which I bought for RM100,000 12 years ago, when hybrid cars were duty-free. This hybrid is still a reliable daily runner and delivers super fuel efficiency.
Now entering the era of electrification, I want to experience how this BEV, as a representative of China's EV industry, performs. Read this column for updates.
The views expressed are those of the writer and do not necessarily reflect those of FMT.