Xpeng steps up go-global strategy with HK entry

Firm partners with Malaysia’s Sime Darby to distribute right-hand drive cars

Chinese electric-vehicle (EV) maker Xpeng has taken a significant step towards tapping the right-hand drive market after forming a partnership with Malaysia’s Sime Darby to distribute its cars in Hong Kong.

The firm is poised to become the first major mainland electriccar assembler to build tailor-made vehicles for Hong Kong customers when sales of its premium EVs fitted with preliminary autonomous driving systems start in the third quarter of this year.

“Today marks a major milestone in Xpeng’s go-global strategy,” company president Brian Gu said yesterday.

“With our advanced smart driving technology and innovative mobility solutions, we are committed to providing Hong Kong car owners with smarter, more convenient and environmentally friendly driving experiences.”

Sime Darby Motors, a unit of the Kuala Lumpur-based automotive-to-property conglomerate, aimed to open a flagship store in Hong Kong to sell Xpeng’s right-hand drive G6 sport utility vehicle and X9 multipurpose vehicle in the third quarter, Xpeng said.

Xpeng currently assembles only left-hand drive vehicles, most of which are sold on the mainland. The Guangzhou-based company, partly owned by Volkswagen Group, is raising the ante in the overseas market as a price war on the mainland, the world’s largest EV market, is escalating and squeezing profit margins.

Last month, CEO and cofounder He Xiaopeng said Thailand, Singapore and Malaysia would be targeted as the firm looked to hone its image as a leading builder of intelligent EVs.

It also planned to make inroads into key European markets such as Germany and France with its left-hand drive models, he added.

Xpeng, along with Shanghai headquartered Nio and Beijing based Li Auto, are viewed as China’s best response to Tesla as their vehicles feature autonomous driving systems, digital cockpits and high-performance batteries.

On the mainland, its vehicles are capable of navigating their way automatically along city streets using the company’s Navigation Guided Pilot.

The five-seat G6, which has a driving range of at least 580km, is priced from 209,900 yuan (HK$227,250) to 276,900 yuan on the mainland. The seven-seat X9, whose basic edition can go as far as 610km on a single charge, is priced at 359,800 yuan to 419,800 yuan.

Xpeng has yet to unveil the prices for its right-hand drive vehicles built for Hong Kong.

“Hong Kong is an ideal market for Xpeng to start with because the company’s stock is publicly traded there and has established brand awareness,” said Eric Han, a senior manager at Suolei, an advisory firm in Shanghai.

“Its profit margin in overseas markets will definitely be higher than that on the mainland where all EV makers are offering discounts to bolster deliveries.”

Cui Dongshu, general secretary of the China Passenger Car Association, said in February most carmakers were likely to continue slashing prices to retain their market share amid slowing sales.

Xpeng is now offering a discount of roughly 10 per cent on its bestselling G6 to spur deliveries at home.

[Xpeng’s] profit margin in overseas markets will be higher than that on the mainland ERIC HAN, SENIOR MANAGER, SUOLEI