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Robinson Road is a main street in Singapore's core business district. This bustling financial street is lined with big brands and has a strong international feel, often attracting Hollywood movies to film here.

In recent years, this street has gradually gained more Chinese elements, such as:BYDThe exhibition hall is located here.

Chua, a staff member at the store, said,I think coming here is not just about buying a car, but also the beginning of experiencing green life.!”

Coincidentally, BYD also brought the "Chinese marketing strategy" to Singapore. On August 4, 2023, BYD City Showroom and Cafe BYD SUNTEC officially opened in Singapore. In addition to BYD SUNTEC, BYD has also opened three new BYD branded restaurants in Singapore, located in Tanjong Pagar, Balestier and Hillview, managed by BYD by 1826.

akin,In many overseas markets, Chinese new energy vehicle brands have created not only a means of transportation, but also a fashionable lifestyle.

Yu Jia, a girl born in the 1990s, stayed in Singapore to work after completing her master's degree. According to her observation, there are more and more BYD cars on the roads in Singapore. And when walking on the streets, the occasional flash of SAIC MG, SAIC Maxus, and GAC Aion will also make people "brighten their eyes".

Recently, Chinese new energy vehicle companies have made new moves. Geely's high-end brand Zeekr announced in early August that itsZeekr XOfficially entering Singapore, the first store will open at the end of August. Almost at the same time, Xiaopeng Motors' high-end model Xiaopeng G6 also started pre-sale in Singapore.

Behind the rising "exposure rate" is the solid market share of Chinese automakers in Singapore. In the first four months of this year, Chinese brands accounted for 18.4% of new cars registered in Singapore, ahead of South Korea (8.1%), non-German European brands (4.8%) and American brands (4%).

The next level story of China's new energy vehicles going overseas has accelerated.

On August 1, the Zeekr X was officially launched at Singapore’s landmark building, the Art and Technology Museum.

The Singapore Art & Science Museum is known as the "Singapore's Welcoming Hand". The scene on that day was said to be very lively, attracting many young people to come and try it out.

At the same time, Zeekr's first store located at 9 Leng Kee Road in Singapore is also in full preparation and is expected to officially open at the end of August. The store has two floors, about 1,300 square meters, and has both sales and delivery functions. In addition, the official said that Zeekr 009 is expected to go on sale in the Singapore market in September this year.

Two days before Zeekr's debut in Singapore, Xpeng Motors also opened a pop-up store in Singapore's central business district. In the pop-up store, consumers can experience the space, intelligent interaction system and intelligent driving system of the Xpeng G6. At the same time, Xpeng Motors also opened product pre-sales in the Singapore market. It is reported that Xpeng Motors is expected to open its first official store in Singapore in September this year.

This is Xpeng Motors' new overseas move following its expansion into Hong Kong and Macau.

Earlier, on March 28 this year, the Singapore Harmony BYD store opened grandly on Robinson Road. As mentioned at the beginning of this article, the new store demonstrates a technological and green concept from design to experience.

BYD, Zeekr, and Xiaopeng are sometimes not clearly positioned in the eyes of the Chinese public. After all, BYD and Geely Auto were once suppliers of low-priced cars in China, and in recent years they have launched high-end models and sub-brands. However, their appearance in Singapore this year has given people a full sense of high-endness - from the location selection to the design of the store.

The most direct sense of high-end is the price - according to Zeekr's official WeChat account "ZEEKR", the price of Zeekr X in Singapore starts from 199,999 SGD (about 1.083 million RMB) for the standard version and 214,999 SGD (about 1.165 million RMB) for the flagship version. In terms of RMB, this is a veritable "million-dollar luxury car".

You should know that the price of Zeekr X in China is about 179,000 yuan to 220,000 yuan, which means that the price of this model in Singapore is nearly 5 times that in China.

Moreover, this high price seems to exist only in Singapore at present: the starting price of Zeekr X in Thailand is 1.199 million baht (about 244,000 yuan), the starting price in Mexico is 799,000 pesos (about 321,600 yuan), and the starting price in Germany is 44,990 euros (about 352,700 yuan). Even in the UAE, which is considered to be "rich", the starting price of Zeekr X is only 170,900 dirhams (about 335,000 yuan).

Taking into account the different vehicle import policies of various countries, as well as other costs such as logistics, tariffs and retained profit margins, it is understandable that the price of Zeekr X overseas is slightly higher than that in China, but the operation of nearly quintupling it and transforming it into a "million-dollar luxury car" is still somewhat surprising.

Prices of some BYD models in Singapore

A more well-known example isChery AutomobileThe "Chery QQ" model was introduced to Singapore earlier. This small car, which is priced at only 40,000 to 50,000 yuan in China, is priced at about 86,000 Singapore dollars (about 460,000 yuan) in Singapore. Netizens joked that the ten-fold price difference was "a sparrow turning into a phoenix overnight."

However, even if the car prices differ by several times or even more than ten times, for car companies, a higher price does not mean higher profits.

Why does a car that sells for just over 200,000 yuan in China sell for over a million yuan in Singapore?

As the previous example shows, almost all cars sold in Singapore are the most expensive in the world. The 2024 Global Wealth and Luxury Lifestyle Report released by Julius Baer Group pointed out that car prices in Singapore are 155% higher than the global average, making it the city with the highest car prices in the world.

The core reason is that Singapore has a small land area of ​​only 735.2 square kilometers, which is slightly smaller than the combined area of ​​Chaoyang and Fengtai districts in Beijing, but has a population of nearly 6 million. In order to ease traffic pressure, the government has strict restrictions on the growth of cars. If you want to own a car, you must first get a "Car Certificate of Entitlement" (COE), and you also have to face high taxes and fees.

The price of this certificate is staggering. In April this year, the price of the large and luxury car group and the open group COE exceeded 100,000 Singapore dollars (about 540,000 yuan), with the highest price being 180,000 Singapore dollars (about 970,000 yuan). The latest data shows that the first round of bidding price for the luxury car group (CAT B) in August has risen again, reaching 106,101 Singapore dollars. It is no exaggeration to say that the price of a COE alone is enough to buy a mid-range BBA in China.

Just from the Certificate of Entitlement, Singapore earned S$4.66 billion (about RMB 25 billion) in 2023.

August 2024, the first bidding price for the Certificate of Entitlement

Part of the selling price is also for shipping costs, after all, these vehicles have to be shipped to Singapore by sea.

Data provided by a shipping company shows that the ocean freight price to Singapore is charged per cubic meter. The LCL price from Shanghai to Singapore is 2,000 yuan/cubic meter for the first weight (including delivery fee, customs clearance fee, etc.), and 1,500 yuan/cubic meter for the additional weight. Heavy goods are converted at 500 kg per cubic meter, and less than one cubic meter is calculated as one cubic meter. The weight of the Zeekr X announced in China is about 2,500 kg. Based on this calculation, the freight cost of transporting this model to the port of Singapore will cost 8,000 yuan (about 1,500 Singapore dollars).

In addition to the two major expenses of COE and shipping costs, other car-related taxes and fees in Singapore are also quite expensive, such as tariffs (CIF * 20%), registration fees (CIF * more than 100%), consumption tax (CIF * 9%), environmental tax, etc., which are also a considerable expense for car companies.

This does not include the store construction costs and marketing costs.So although it seems that cars are sold at high prices in Singapore, for car companies, the profits are not necessarily higher than in China.

Lin Xianping, executive deputy secretary-general of the China Urban Expert Think Tank Committee, believes that the high prices of car companies' models in Singapore do not necessarily bring high profits, and factors such as market competition and sales channel brand awareness need to be considered. At the same time, competition in the new energy vehicle market is not only about price competition, but also includes competition in technology, service, brand and other aspects.

Secondly, market competition is also an important factor affecting sales profits. Although the electric vehicle market in Singapore is growing rapidly, competition is also increasingly fierce. Japanese and German brands have a deep historical accumulation in Singapore, and Korean and American brands have also been deeply rooted for many years. Domestic brands need to face competition from other international brands and local brands.

The financial reports of many new energy vehicle companies also show that the profits from vehicle sales alone are very limited.TeslaThe net profit margins of BYD and ZEKR were 5.37% and 3.82% respectively, barely reaching the profit line. The net profit margins of ZEKR and Xpeng, two car companies that have just entered Singapore, are as low as -13.72% and -20.89%. Considering the publicity and promotion costs faced in the new market, the profit margins of the two companies in Singapore may be even lower.

For consumers, after buying a car, they have to face other expenses such as electronic road fees, insurance and road tax, as well as daily expenses of an average of 9,000 Singapore dollars per year. Therefore, owning a car in Singapore is definitely a "patent of the rich."

After working in Singapore for a few years, Yujia also thought about buying a car, but the high price discouraged her.

"Singapore's COE is open for bidding twice a month. You have to entrust a bank or 4S store to help you bid. You have to pay a deposit of 10,000 Singapore dollars before bidding. The process is very complicated." She also emphasized that parking in Singapore is also difficult because there are too few parking spaces. If you go to a parking space in a commercial area, you have to pay a parking fee of 2-5 Singapore dollars per hour, which means 70-80 yuan for 4-5 hours of parking.

After comprehensive consideration, she chose public transportation and short-term car rental services when traveling with her family.

Deloitte's research report shows that consumers in Southeast Asian countries are more willing to buy cars from authorized dealers.

Young, a BYD car owner, said that when buying a car in Singapore, one can go to an authorized dealer’s 4S store or through a parallel importer.

"The advantage of 4S stores is that they have a relatively complete range of after-sales services and guaranteed repairs. They provide a one-stop service including vehicle sales, spare parts, official after-sales services, etc., but the fees are relatively high. There is basically no difference between the vehicles sold by parallel importers and those sold by 4S stores, and the prices are relatively low, basically 10,000 to 20,000 Singapore dollars cheaper." said Young.

In her impression,Singaporeans still have a low acceptance of Chinese brands, and they prefer Japanese and German brands."Unless they are Grab drivers, they need their cars to be durable, so they will choose BYD. Otherwise, ordinary consumers still prefer traditional car brands." (Author's note: In 2017, BYD e6 pure electric taxis were put into operation in Singapore, which gave many local consumers the impression of "durability".)

BYD cars on the streets of Singapore

The BYD by 1826 theme restaurant mentioned by Young is located inside Suntec City Shopping Center. Different from the common 4S stores in China that focus on "selling cars and catering", this restaurant is a real restaurant where you can sit down and eat, offering a variety of dishes and set meals, and the BYD car name and information are embedded in the menu. There are also small BYD car models around the restaurant.

Although setting up car showrooms in shopping malls is very common in China, it is less common abroad. BYD can be said to be the first car company to open a store in a shopping mall in Singapore.

In fact, this is not entirely BYD’s idea. According to information, BYD by 1826 was launched in cooperation with Singapore’s auto retailer Vantage Automotive, with the aim of impressing local consumers with a new marketing approach and promoting the concept of “changing lifestyles” in the local area.

BYD by 1826 Menu

In fact, when many Chinese car brands enter the Singapore market, their first step is to choose to cooperate with local dealers.

Premium Automobiles is a distributor of Zeekr and also a distributor of Xpeng Motors. It is a local distributor established in 1999 and is the exclusive distributor of Audi cars in Singapore.

Dealer Vincar currently represents two major brands, GAC Aion and Nezha Auto. Vincar is also a local brand in Singapore. It started out as a used car brand in 1989, and later gradually expanded its business to the import and export of new cars, representing many new models from Europe and Japan.

In addition, Vertex Automobile represents the Omoda and Jaecoo brands under Chery Automobile;Great Wall MotorsChoose to cooperate with Cycle & Carriage Group toOra Good CatIntroduced into the Singapore market. Depending on the model, BYD's dealers in Singapore are Sime Darby, E-Auto and Vantage Automotive.

Among them, Sime Darby is one of the oldest multinational companies in Malaysia. It entered the Singapore market in 1982 and is one of the world's largest BMW car dealers and also the world's largest Rolls-Royce dealer.

By cooperating with these dealers, Chinese new energy vehicles were able to be quickly launched in Singapore.

Jiang Kunping, CEO of East-West New Energy (Chengdu) Co., Ltd., believes thatThere are two major benefits to entering a new market through dealer channels. First, it reduces risk and quickly verifies the local acceptance of one's own brand. At the same time, it reduces the capital investment of the OEM itself and allows dealers to prepare stocks. Second, local channels are more familiar with local culture and have a ready-made local customer base. They can directly graft various resources to achieve the effect of "leveraging power".

But cooperation with dealers also brings another problem - profit sharing.

On April 9 this year, the Weibo topic "BYD's net profit per car is 9,000 yuan" became a hot search. In fact, this 9,000 yuan is still conservative. In 2023, BYD sold a total of 3.024 million cars and created a net profit of 30 billion yuan. Calculated at an average price of 159,800 yuan, the net profit for each car sold was about 8,600 yuan.

Image source: Weibo

An analyst from a securities firm told Xiaguang News Agency that in view of the comprehensive consideration of multiple factors such as protecting the local industrial base, promoting economic development, and improving local employment levels, Southeast Asian countries are more welcoming to business methods such as joint ventures, local factories and the establishment of branches. These models can achieve the sharing of benefits with the local economy and are therefore more popular.

Some industry insiders have also expressed their concerns. The "trading company + overseas general agent" model has low entry difficulty and low capital requirements, but the difficulty lies in the inability to control after-sales and services, and the inability to establish brand power and customer control; the "trading company + local dealer system" model requires the construction of localized attributes from the training system, business processes, and digital capabilities, which has high requirements for capital investment and local management capabilities, and has higher risks.

Therefore, car companies need to distinguish between short-term and long-term goals and choose a suitable layout model in order to develop smoothly locally.

Although Chinese new energy vehicle brands have technological advantages, they still face challenges in many aspects such as brand awareness, after-sales network, localized operations, consumer psychology, and supply chain.

“The next three to five years will be a critical period for Chinese electric vehicle brands to expand into Singapore and even Southeast Asian markets..” said an industry insider.

Wang Peng, an associate researcher at the Chinese Academy of Social Sciences, also believes that if we must talk about the problems of new energy vehicles going overseas, the first problem is that the export ratio in the high-end new energy vehicle market is relatively low. The current global high-end market may still be concentrated inBenzCompared with traditional car companies such as Audi, our mid-to-high-end models need to further improve their services and visibility. Secondly, the brand of Chinese complete vehicles needs to be further established. Only by making Chinese brands known to the world through Made in China can we truly tell the Chinese story well.

Even though Chinese consumers believe that Chinese new energy vehicles are already moving towards high-end, Chua's perception of Chinese brand cars still remains the same as more than ten years ago - the negative impression of relatively backward technology and lax quality control. This impression did not change until he worked at BYD for a period of time.

"The large battery, long driving range, ultra-fast charging, and smooth human-computer interaction interface made me feel the advantages of Chinese brand cars for the first time. Functions such as automatic cruise control and automatic parking, coupled with extremely cost-effective prices, have made BYD the best-selling pure electric brand in Singapore," said Chua.

A set of data shows that in 2023, the total sales of pure electric vehicles in Singapore were 5,465, of which BYD sold 1,416 electric vehicles, ranking first in sales, 475 more than the second-ranked Tesla.

In addition to products, Chinese automakers have also brought more industrial chain solutions to Singapore.

As of August this year, there are about 6,200 charging piles in Singapore. During the same period, the number of electric vehicles in Singapore is close to 18,000, and the overall car-to-pile ratio is about 3:1, which is still far below the target value of 1:1. In addition, Singapore does not have the concept of "fixed parking spaces", and basically it is first-come, first-served. The common home charging pile model in China is difficult to promote locally.

Therefore, operating charging stations to solve the charging problem and then boost car sales has become one of the ways for Chinese car companies to enter the Singapore market.

In November 2023, BYD and Zhongtong Bus won the bid for the largest electric bus purchase order from the Land Transport Authority of Singapore (LTA). After receiving the order, BYD started to build the matching bus charging equipment. Earlier, when BYD e6 was introduced to Singapore as a taxi, BYD also worked with HTC to build 10 charging stations and 85 charging piles in the local area.

In addition to car companies, Sinopec and PetroChina have also developed charging businesses. Sinopec launched a new electric vehicle charging service PIT (POWERINTIME) at its gas stations in Singapore in November last year. Singapore Petroleum, a subsidiary of PetroChina, has also signed a charging cooperation agreement with the local state-owned enterprise Singapore Power Group (SP Group), planning to install fast charging piles at five of its own gas stations.

According to the "Green Development Blueprint 2030" released by Singapore, it is expected that by 2030, the construction of charging pile infrastructure in Singapore will increase from 28,000 to 60,000. This means that now is a good time for Chinese charging piles to expand to Singapore.

BYD buses on the streets of Singapore

Cui Dongshu, secretary general of the Passenger Car Market Information Joint Committee, believes that automakers cannot lose their industrial chain advantages when going overseas, so the best way is to "go overseas in groups." The so-called "grouping" means that when leading automakers go overseas to invest and build factories, they bring their supply chain partners with them. On the other hand, if you are a supplier or service provider of these automakers, then sticking with them is the best strategy.

Yang Hong, Chairman and President of Hangsheng Electronics, also said at the 2024 Partner Conference that the export of automobiles must be a group export of the entire industry chain, and it is a "new export" of production capacity, services, brands, and supply chains. If auto parts companies want to become global companies and century-old stores, they must expand their business overseas, make good use of global technology, resources, and talents, and build localized R&D, production, and supply chain capabilities. Only in this way can they build cost advantages and supply chain advantages.

In a research report by Tianfeng Securities, Southeast Asia was divided into three levels based on annual automobile market sales, with Singapore, Cambodia and Myanmar ranking at the bottom with annual sales of 100,000 vehicles or less.

Image source: Tianfeng Securities

The drunkard's real interest is not in the wine——What they are interested in is Singapore's radiation effect.

As an island country with a majority of Chinese, Singapore is not simple in strength. It is known as the "shadow capital of Southeast Asia". It is not only one of the smallest countries in the world, but also one of the richest countries in the world; it is not only the country with the highest per capita income in Southeast Asia, but also the country with the highest proportion of Chinese population in Southeast Asia.

Although Singapore is a "tiny country" in terms of area, it is an industrial power in the entire Southeast Asia region. Singapore is the world's third largest oil refining center, and is also the world's major electronic equipment and precision machinery manufacturing base. The computer hard drives, semiconductor products and biopharmaceuticals produced by Singapore are exported to the world. It ranks third in the "Top 20 Global Urban Economic Competitiveness in 2019".

In addition, another major advantage of Singapore is its abundant financial capital. Objectively, it has become the "Swiss Bank" and "Wall Street" of Southeast Asia, and together with Hong Kong, China, it plays the role of a "bridge" for the flow of overseas Chinese capital. About a quarter of China's total investment in countries participating in the "Belt and Road" initiative is realized through Singapore.

Zhang Xiaorong, director of the Deep Technology Research Institute, believes thatCompared with Thailand and European markets, although Singapore's market size is smaller, as an international financial center and a major center of technological innovation, it provides unique value to Chinese auto companies.Singapore's open policy environment, perfect infrastructure and rich cooperation resources provide all-round support for Chinese automakers in R&D, production and market testing. In addition, Singapore's positive policies and market acceptance for electric vehicles also provide good business opportunities for Chinese automakers.

Singapore is not only attractive to Chinese companies, but is also regarded as an offshore center by many Southeast Asian countries. Many Asian companies, such as Japanese, Indian and Thai companies, have also settled here. According to statistics from the Singapore Economic Development Board, as of 2022, more than 7,000 multinational companies have established operating organizations in Singapore, of which 4,200 have established regional headquarters in Singapore.

Zhan Junhao, a well-known strategic positioning expert and founder of Fujian Huace Brand Positioning Consulting, pointed out that as a core member of ASEAN, Singapore's market influence radiates throughout Southeast Asia. After Chinese automakers gain a foothold in Singapore, they can use its geographical advantages and market experience to quickly expand to neighboring countries.

Take BYD K9 electric bus as an example. This 12-meter-long bus has been put into operation in Singapore since 2016. It is very popular among local drivers and passengers because of its zero emission, zero fuel consumption, comfortable driving and good riding experience. Data shows that the fuel consumption cost of K9 is more than 2/3 lower than that of similar products, saving 230,000 yuan in operating costs each year.

After its success in Singapore, BYD K9 expanded its influence to India, winning an order for 290 electric buses in India in 2018 and signing an order for 1,000 K9s the following year. Today, BYD's share of the Indian electric bus market has exceeded 80%.

Premium Automobiles Managing Director Li Haolun also mentioned: "Singapore is a 'star' market in Southeast Asia and an important display platform. If Chinese EV car manufacturers can gain a foothold in Singapore, they will have the opportunity to showcase their products and brand image to Southeast Asian consumers and open up a wider door to the Southeast Asian market."

It is generally believed that the opportunities that new energy vehicles bring to China's automobile industry are similar to the opportunities faced by Japanese automakers in the 1970s.

The 1960s-1980s period was the initial stage of Japanese automakers' overseas expansion, and they mainly expanded the automobile market by exporting complete vehicles; from the 1980s to the end of the 20th century, many countries successively increased import tariffs and trade barriers, and the cost of exporting complete vehicles increased, forcing Japanese automakers to establish production bases overseas; after the 21st century, Japanese automakers' overseas layout has been relatively complete, and they have established production bases and sales networks in different countries and regions. Overseas automobile production and sales have further increased, once reaching four times the domestic sales.

From the perspective of the path, Chinese automakers will also go through a similar process. Cui Dongshu believes that the opportunities facing Chinese automakers now are even greater than those faced by Japanese automakers in the 1970s. "In the context of the oil crisis, oil prices are high, and Japanese automakers have opportunities for development, but the essence is still homogeneous competition, while Chinese automakers' current advantages in electric vehicles are more inclined to differentiated competition."

In the future, the ability to provide high-quality services combined with product differentiation will be the key to determining the success or failure of Chinese auto companies going overseas.

The reason why Japanese cars can occupy a large market share in many Southeast Asian countries is inseparable from their excellent system capabilities and service capabilities.ToyotaAutomakers represented by Honda focus on teamwork overseas. Automakers and parts manufacturers collaborate with each other, and trading companies' information systems transmit more than 60,000 pieces of customer intelligence every day, forming a strong cross-cultural service capability.

However, Chinese automakers entered Southeast Asian countries relatively late, and the number of 4S stores is insufficient. The better locations have been occupied by Japanese 4S stores, and the system capacity is inferior to that of Japanese stores. In addition, the parts of Chinese automakers still need to be transported from China, which brings huge challenges to the timeliness of maintenance services.

Chinese new energy vehicle brands that are eager to go overseas, in addition to paying attention to sales and rankings, are more urgently in need of working with partners to build a "one-stop" service system that provides the ability to view, test drive, buy and repair cars. Only then will they have a chance to win the favor of more consumers in the future.

Singapore, a high-consumption market in Asia and even the world, is a testing ground for Chinese automakers to hone their service capabilities around the world.