BYD Auto to Establish Cambodia Assembly Plant, Boosting Economic Prospects
BYD Auto plans to establish an assembly plant in Cambodia by late 2025, producing 10,000 vehicles annually. Located in the Sihanoukville Special Economic Zone, the initiative is part of a strategic move by Chinese companies to invest amid changing global trade relations. The economic benefits include job creation and the establishment of vehicle parts manufacturing in Cambodia, catering mainly to international markets, especially the US, amid favorable export conditions.
BYD Auto is set to establish an assembly plant in Cambodia by the end of 2025, with an anticipated annual production capacity of 10,000 electric and hybrid vehicles. The facility will be located in the Sihanoukville Special Economic Zone, leveraging the proximity to the Sihanoukville Autonomous Port for easier importation of vehicle components. The first vice-president of the Council for the Development of Cambodia, Sun Chanthol, confirmed that initial production is expected to commence promptly, with vehicles rolling off the assembly line by November 2023.
Cambodia’s attractiveness for foreign investment has been highlighted by the shifting of Chinese companies, drawn by the absence of tariffs for goods produced and exported to the United States. Lor Vichet of the Cambodia Chinese Commerce Association noted that the favorable trade conditions could enhance Cambodia’s role as a manufacturing hub, especially before it transitions from Least Developed Country status by 2029. He emphasized that the primary output from the BYD factory will be targeted towards international markets rather than local demand, given the nascent EV market in Cambodia.
Economist Hong Vanak expressed optimism about BYD’s impact, considering its potential to create jobs and improve labor skills. The presence of such a plant may also facilitate the growth of ancillary vehicle part manufacturing, thereby increasing tax revenues and attracting further foreign investments. Moreover, affordable pricing is expected to encourage local consumers to adopt EVs, improving access to spare parts in the region.
Recent figures from the General Department of Customs and Excise show that Cambodia’s spending on imported vehicles surpassed one billion dollars in 2024, which signifies a growing demand for automobiles. Additionally, the registration of electric vehicles surged by 620% from 2023 to 2024, indicating an emerging interest in sustainable transport options among Cambodians.
BYD Auto’s planned investment symbolizes a significant step towards transforming Cambodia’s automotive industry and enhancing its economic landscape while addressing global trade dynamics. The venture can significantly boost local job creation, stimulate the economy, and potentially elevate Cambodia’s stature as a manufacturing destination in Southeast Asia.
The establishment of the BYD assembly plant in Cambodia is a timely development in the context of shifting global trade dynamics. With a focus on electric vehicles, BYD’s investment comes amidst increasing uncertainties in global politics and economics, particularly related to trade relations between major economies like China and the US. The strategy to utilize Cambodia as a manufacturing base is supported by favorable trade conditions, especially regarding exports to the US, which encourages foreign companies to invest and produce locally. This move aligns with Cambodia’s objectives to uplift its economy and enhance its manufacturing capabilities.
The announcement of BYD’s assembly plant in Cambodia is poised to have a positive impact on the country’s economy through job creation, enhanced manufacturing capabilities, and increased tax revenues. The strategic location and favorable trade conditions make Cambodia an attractive destination for foreign investment, particularly in the electric vehicle sector. As the local EV market expands and consumer adoption grows, Cambodia is likely to strengthen its position in regional manufacturing, which may attract further international investments in various industries.
Original Source: www.thestar.com.my
