Chinese car brands’ market share grows in S’pore as Japanese, German names cede some ground

EV brand BYD was the biggest-selling Chinese car brand in Singapore in 2024.ST PHOTO: MARK CHEONG

SINGAPORE - After testing a range of cars from Japanese, American, French and German brands, Mr Ler Hwee Tiong, 54, gave up his nearly decade-old Mercedes-Benz in December 2024 for an electric vehicle (EV) from Omoda, a brand by the Chinese company Chery.

The Asia director of a global automotive repair chain said the Chinese EV’s price, features and warranty contributed to his decision.

Data from the Land Transport Authority released in January showed that Chinese car brands made inroads in 2024, forming 18.2 per cent of new car registrations for the year. This is a leap from 5.9 per cent in 2023.

In all, there were 7,850 new cars from Chinese brands registered in 2024, up from 1,781 units in 2023. All but 75 were EVs.

The growth of Chinese car brands came as brands from Japan and Germany lost ground, even though they remained in the lead.

There were 15,337 registrations for Japanese car brands in 2024, an increase of 2,298 units from 2023. But this was not enough to stop their market share from slipping to 35.6 per cent in 2024, from 43.1 per cent the year before.

German car brands took 28.2 per cent of the market (12,131 units) in 2024, down from 32.4 per cent in 2023. They put 2,348 more cars on the road than in 2023.

These figures included EVs, cars with internal combustion engines (ICE) and hybrids.

Leading the pack for the Chinese brands was BYD, with 6,191 EVs registered. This was followed by MG, with 536 units. MG was the only Chinese brand in 2024 that offered both ICE cars and EVs in Singapore.

Xpeng – which launched its offerings here in August 2024 – registered 336 units in five months, putting it in third place.

The market share of American brands grew, to 5.6 per cent in 2024 from 3.2 per cent, as did that for South Korean brands, which inched up to 7.7 per cent from 7.6 per cent.

Tesla took the biggest piece of the American share of the pie. Its 2,384 units registered in 2024 represented 98.8 per cent of American car registrations for the year (2,412).

Nearly all 3,295 Korean brand registrations came from Hyundai (2,053) and Kia (1,214).

In all, 43,022 new cars were registered in 2024 – 42.3 per cent more than the 30,225 units in 2023.

Experts said the switch from ICE cars to EVs drove the rising adoption of Chinese brands, especially in the mass-market segment.

Having gained a substantial foothold in the market, Chinese car brands are expected to continue growing and edging their way into premium segments, the experts added.

Seven new Chinese brands entered the Singapore market in 2024, taking the total to 11. Car buyers can expect at least three more Chinese brands to join the fray in 2025, namely Deepal, Leapmotor and Skyworth.

Singapore representatives of the Chinese brands here are bullish that they will continue to gain ground in 2025.

Mr Anthony Teo, managing director at Sime Motors, which distributes BYD in Singapore, expects more Chinese brands to be among Singapore’s top 10 sellers in 2025 as consumers become increasingly receptive to these brands. In 2024, BYD was the only Chinese brand on the top 10 list of cars sold by authorised distributors.

Ms Gem Ng, spokeswoman for Eurokars Group, which distributes MG, said educating consumers on the benefits of going electric is still needed as competition intensifies in the Chinese EV industry, with more brands and products.

Mr Lee Hoe Lone, managing director of Premium Automobiles, which distributes Xpeng, said the company aims to more than double its 2024 sales numbers in Singapore with the introduction of a second EV model and the increase in the certificate of entitlement (COE) supply forecast for 2025.

Experts believe Chinese brands will gain further ground in the Singapore EV market, and those from Japan and Germany will have to work hard to retain their positions.

Mr Niels de Boer, chief operating officer of the Energy Research Institute at Nanyang Technological University, said Chinese EV brands have been particularly strong in offering mass-market options, which are not adequately addressed by automakers from other countries.

Besides generally higher asking prices, European EVs tend to have unnecessarily powerful motors, he added. Hence, they attract higher road taxes in Singapore and end up being classified as Category B, or more powerful cars, with pricier COE premiums.

In contrast, he said, Chinese brands, as well as Tesla, offer models with less than 110kW of power in Singapore as alternatives to more powerful versions that they sell in other countries. EVs with outputs that do not breach this threshold qualify as Category A, or less powerful cars, for which the COE premium is usually lower.

Mr de Boer noted that the quality of Chinese cars has improved markedly from the time when Chinese companies started making ICE cars. He noted the progress made in the crash safety of Chinese cars, which have leapt from scoring very badly in the early years to be “on a par with European, Japanese and Korean brands”.

Still, he noted that he is worried about the long-term reliability of Chinese cars in Singapore’s tropical climate, as there is no data on this yet. “The Japanese are still the benchmark for quality and reliability, but they offer very little in terms of EVs,” he said.

Associate Professor Ang Swee Hoon from NUS Business School, who specialises in marketing, said Japanese and German brands can try to play catch-up with comparable products by creating lower-end sub-brands with different names. But this would be an expensive exercise that may dilute their brands’ image.

She said the popularity of Chinese car brands has been driven by their affordability at a time of rising living costs. Interest in these brands will grow if consumers are satisfied with what they get for their money, she added. “If economic conditions remain such that people are looking for affordability rather than aspirational, the Chinese brands stand to gain.”

Singapore Management University associate professor of marketing Hannah Chang said the branding and marketing efforts of the Chinese brands are getting more sophisticated, citing partnerships between BYD and established carmakers such as Toyota and Mercedes-Benz.

“These partnerships not only raise their brand awareness globally, but also help lend credibility and elevate consumer perception of these relatively new Chinese brands in the market,” said Prof Chang.

At the same time, she believes that with other car manufacturers also growing their EV offerings, competition will intensify.

Prof Chang added that Japanese and German car brands have the benefit of strong brand equity and favourable brand perception built over time.

“These can be leveraged if the car brands can ramp up their innovation in EV technology and stay competitive in pricing for the chosen segment, whether mass-market or premium,” she said.

In December 2024, Mr Ler, the automotive repair chain director, bought his Omoda electric car after three months of research.

He started looking at EV options after he was disappointed with the prices of ICE offerings from other brands, as well as the lack of features in these models.

So far, he is satisfied with the ease of driving his Omoda and the convenient access to EV chargers, but he admits that the reliability of Chinese EVs is still an unknown for now and is counting on the 10-year battery warranty for assurance.

Batteries, the priciest part of an EV, are covered under warranties here that range between eight and 10 years.

Mr Eddie Chua, who works in sales, replaced his five-year-old BMW sport utility vehicle in the middle of 2024 with a BYD electric car. He made the decision after he noticed that EV chargers had been installed at the multi-storey carpark near his home.

In terms of savings, Mr Chua said the EV costs him around $200 a month to charge, compared with $500 in fuel bills before.

He said the savings have been adequate in offsetting the higher road tax and insurance premium for his EV.

He said the annual insurance for his BYD is $300 to $400 more than that for his previous ICE car. At $1,500, the road tax is also considerably higher than the $684 he used to pay for his BMW.

He said the BYD’s performance is comparable to that of his previous car, and it is smooth and easy to drive. But the suspension is a little soft for the bumpy roads in Malaysia, he added.

Other consumers, however, prefer EVs made elsewhere.

Mr Michael Tan, 50, gave up his Volkswagen automobile, an ICE car, in 2022 for a Tesla electric car.

The director at an electronics distribution company said his EV has been reliable so far, and he appreciates its high-tech elements, such as over-the-air updates. This means the car’s features can be enhanced remotely without having to take the vehicle to a workshop.

Previous updates included new entertainment features such as games that can be played on the car’s infotainment system, as well as a system that lets the owner view the car’s surroundings from a mobile application, said the Tesla Singapore website.

Mr Tan said switching to an EV has brought him cost savings. From spending $500 a month on petrol, juicing up his car with electricity now costs around $120 monthly.

Nevertheless, his high-powered, dual-motor Tesla attracts a hefty annual road tax of $5,600, compared with less than $1,200 for the Volkswagen.