Automakers from mainland China are gaining a foothold in Hong Kong’s taxi industry, where fleets have consisted overwhelmingly of Toyota Motor vehicles.
Hong Kong was once a gateway to the Chinese mainland for foreign automakers, but it has begun serving as a steppingstone for Chinese carmakers seeking to expand overseas.
Toyota vehicles have been regarded highly for their fuel efficiency and reliability. Over 90% of Hong Kong’s roughly 18,000 taxicabs are said to be Toyota vehicles.
But these days, Chinese brands are becoming a common sight on the road.
“I like how quiet it is,” said a taxi driver operating a Maxus electric vehicle from state-owned SAIC Motor. “Mainland tourists who are used to riding in EVs also enjoy it.”
Hong Kong’s government is encouraging new players to enter the industry to improve service. Five operators were granted licenses by August to offer an app-based ride service under a new program, each tapping Chinese EVs.
SynCab, for instance, has introduced SAIC cars while Big Boss Taxi uses GAC vehicles. The five providers are expected to operate a combined 3,500 units.
Though it is unclear how much of each operator’s fleet will consist of Chinese EVs, it is clear that the Toyota-dominated industry has reached a turning point.
Chinese vehicles are winning over ordinary drivers in Hong Kong as well, with dedicated showrooms opening one after another. Government data shows that Chinese brands sold around 1,500 vehicles in July, a market share of about 40%, eclipsing the share of less than 30% held by Japanese rivals.
The Hong Kong market has transformed over the past five years. In July 2020, Japanese brands accounted for nearly 70% of sales while Chinese companies made up less than 1%.
Many mainland automakers consider success in Hong Kong, an international city, as the first step in branching out to other markets.
Li Auto opened an overseas business head office in Hong Kong earlier this year. The company is determined to “break into the global market,” a senior official said.
Hong Kong is also gaining importance as a place to raise funds for international expansion. State-owned Chery Automobile went public on the Hong Kong Exchange in September.
In October, Hong Kong launched a task force for supporting mainland companies entering foreign markets. The group, dubbed the GoGlobal task force, will “work closely with public institutions, professional bodies, chambers of commerce and business organizations,” financial secretary Paul Chan said. “This collaborative approach allows us to pool expertise, generate ideas and create powerful synergies.”
This article first appeared on Nikkei Asia. It has been republished here as part of 36Kr’s ongoing partnership with Nikkei.