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China's Xpeng edges closer to selling right-hand drive EVs in Hong Kong, appointing Malaysian firm as local distributor

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

It is poised to become the first major Chinese electric car assembler to build tailor-made vehicles for local 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," Brian Gu, president of Xpeng, said in a statement on Tuesday. "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."

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Sime Darby Motors, a unit of Kuala Lumpur-based automotive to property conglomerate, aims 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 in a statement.

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 overseas market as a bruising price war in mainland China, the world's largest EV market, is escalating and squeezing profit margins.

Last month, CEO and co-founder He Xiaopeng said Thailand, Singapore and Malaysia would be targeted as the company looked to hone its international image as a ­leading builder of intelligent EVs. It also plans to make inroads into key European markets such as Germany and France with its ­left-hand drive models, he added.

Along with Shanghai-based Nio and Beijing-headquartered Li Auto, Xpeng is 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 580 kilometres, is priced from 209,900 yuan (US$29,015) 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 between 359,800 yuan and 419,800 yuan.

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

"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 the overseas markets will definitely be higher than in 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 that most carmakers are likely to continue slashing prices to retain their market share amid a slowdown in the mainland EV market.

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

The company also plans to launch a mass-market brand this month to challenge market leader BYD in the world's largest EV market.

Models under this new brand will be fitted with autonomous driving systems and priced between 100,000 yuan and 150,000 yuan, He told an automotive forum in Beijing last month.

This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2024 South China Morning Post Publishers Ltd. All rights reserved.

Copyright (c) 2024. South China Morning Post Publishers Ltd. All rights reserved.