KUALA LUMPUR: The influx of Chinese car manufacturers in Malaysia's automotive market reflects a significant shift in consumer choices and industry dynamics, driven by factors such as affordability, technology and changing preferences.

However, public confidence in these brands and assurance that the product sold is being taken care of, such as value for money, comprehensive after sales network support and reliable pricing strategy, are also crucial considerations for Malaysian consumers.

Particularly fuelled by the increasing adoption of electric vehicles (EVs), Chinese brands such as GWM's Ora Good Cat and BYD, among others entering Malaysia, offer local consumers a wider range of choices with more affordable price points compared to other global marques.

According to an experienced automotive official, Chinese brands are known for competitive pricing without compromising on quality. 

They provide a cost-effective alternative, while also being at the forefront of EV technology and innovation.

However, long-term trust and a clear commitment to the market are essential for building customer confidence., the olficial said. 

Local distributors like Sime Darby Motors, with its extensive history and scale in Malaysia, ensure that the brands they represent are well-taken care of and provide peace of mind for customers through their long-standing presence.

This is crucial as reputable local distributors with a commitment to long-term business can honour the warranty coverage for owners through their network of dealers and ensure parts are available in sufficient quantity for vehicle maintenance.

While most Chinese auto brands do not have established distributors in Malaysia, their entry into the market presents lucrative opportunities for local distributors and dealerships to capitalise on this growing demand.

Industry observers said partnering with a local distributor offers several competitive advantages. 

This includes leveraging on local experience in distribution and retail, existing infrastructure and resources, and a deep understanding of local customers' preferences and needs.

"This local expertise and knowledge of the market can enable new brands to better navigate the complexities of the Malaysian automotive landscape and tailor their offerings to resonate with local consumers," one of them said. 

In contrast, a brand entering directly on its own will need to invest substantial resources and time to re-establish all of these components from scratch, potentially slowing down its entry to the market.

The observer opines that local distributors may also have centralised facilities, such as warehouses, logistics networks, workshops and customer service centres. 

This can be a significant advantage for new brands entering the market, allowing them to streamline operations and provide efficient support to customers.

"Moreover, reputable local distributors invest significantly in parts and inventory. 

"This commitment requires a substantial amount of capital to ensure a steady supply and proper storage of parts over an extended period," the observer added. 

Without a trusted local distributor, he noted, there may be risks that owners may have difficulties later finding service centres to perform their warranty repairs and getting genuine parts for their vehicle, which could impact customer satisfaction and brand reputation.

The observer noted that partnering with an established local distributor represents the fastest go-to-market strategy, as customers are more likely to trust and engage with brands that are backed by reputable and familiar local companies. 

"Malaysian consumers need time to build trust in a new brand, and it can be challenging for new entrants to the market to gain traction without a local partner that consumers already have confidence in," he added. 

The approach to how a Chinese brand launches in Malaysia can also instil confidence among local consumers. 

For example, launching an official brand presence in Malaysia, as opposed to just introducing a vehicle model, can be more reassuring and impactful, showcasing the brand's long-term commitment to the market.  

Additionally, launching with the existing infrastructure and support of local distributors can reflect the strength and reliability of the brand, demonstrating a well-established local presence and a readiness to provide comprehensive sales and after sales services.

Another observer highlighted BYD as a good case in point. 

"From a consumer perspective, because BYD works with an experienced and trusted local distributor, they seem to be way ahead in terms of being able to grow their presence in Malaysia effectively."

When BYD launched with Sime Darby Motors as its local distribution partner in 2022, this provided access to centralised facilities, an extensive network of dealers to work with, and the ability to rapidly expand its dealer network across the country in a short period of time. 

This end-to-end support from an established local partner likely contributes to BYD's strong sales performance. 

As indicated by a recent Malaysian Automotive Association's (MAA) report, BYD fared very well in terms of sales compared to other Chinese brands such as Neta and Ora Good Cat.

Testament to the strength of its local partnership, following BYD's launch, it has continued to expand its dealership network with nationwide showrooms complete with comprehensive after sales services.

Customers will have access to comprehensive warranty packages and service plans tailored to the needs of EV owners, providing peace of mind and ensuring long-term satisfaction.

The presence of state-of-the-art service centres and highly trained technicians also ensures that maintenance and repairs are conducted promptly and efficiently, minimising downtime and inconvenience for customers.

Having a dedicated parts distribution centre ensures that genuine parts are readily available when needed, reducing waiting times for repairs and ensuring optimal performance and safety of the vehicles.

A motoring journalist said local distributors often prioritise personalised customer care, offering dedicated support channels and responsive assistance to address any queries or concerns promptly, enhancing the overall ownership experience. 

Furthermore, local sales representatives tend to have better communication skills and expertise when facing customers, enabling a more seamless and culturally attuned customer experience.

BYD has also been launching new models that have been very popular among Malaysian customers, further solidifying its presence and market share in the country.

The journalist said by establishing partnerships with Chinese auto manufacturers, Malaysian distributors can tap into the growing demand for Chinese vehicles to expand their product offerings and market presence. 

They can also leverage their local expertise and infrastructure to provide a competitive advantage in the rapidly evolving automotive landscape.

"A strong local distributor carries reliability and credibility, building trust in quality and loyalty to the brand. 

"Local distributors would understand the local market better and navigate regulations more effectively," he said.

It is also essential for brands to handle customer concerns tactfully, especially in response to complaints, as mishandling such situations can potentially draw public criticism. 

Established local distributors do things "the Malaysian way", tailoring their approach, communication, sales and services to resonate with local customers.

https://www.nst.com.my/business/corporate/2024/07/1070554/speed-bumps-chinese-auto-brands-wiithout-local-partners