Dividend investors love to invest in companies with a long-standing market dominance that can make profits and pay dividends hopefully for a long time. While this is true, once in while you have to be shaken to understand how quickly things can change if you are not doing your homework.

In an article by Daisuke Wakabayashi and Claire Fu of the New York Times News Service, the story is how the GAC Aion, an electric vehicle maker in China sent a team to Thailand to open up the market. The team arrived with a long list of things to accomplish but no office, no factory, no local employees and no clue. They set up offices in a hotel using the conference rooms and started to find an office, recruit dealers, devise a business strategy. In 74 days after arriving in Thailand, they sold their first EV.

Chinese EV manufacturers such as Aion are stampeding into overseas markets. Thailand is the first country to experience the sudden influx of China’s brands and confronting how their ambition and competitiveness are reshaping the car industry.

Last year sales of popular Japanese brands such as Nissan, Mazda and Mitsubishi plummeted as consumers bought new electric cars from Chinese manufacturers. Dealers that had worked for decades with American and Japanese brands are now turning showrooms to Chinese EVs.

Thailand is the biggest market in Southeast Asia and is known as Detroit of Asia. The country serves as a manufacturing hub, or it is beachhead market. In 2022, Japanese brands accounted for 86% of the market, last year that fell to 75%. 6 Chinese electric-vehicle companies are already selling in Thailand and 3 more are coming this year including BYD, Aion, Great Wall, Neta and Chery.

Aion in its first year in Thailand opened 41 showrooms and started production of a new factory in July. It has announced plans to open a plant in Indonesia and start selling its cars in 9 countries across Southeast Asia.

Tesla started with the higher priced vehicles, the Chinese companies typically start with low price vehicles to gain market share then bring in more expensive EVs.

Linking to dividend paying stocks, when many long paying dividend stocks, they have near monopoly or operate in those types of markets and that is good for the investor. However, companies around the world can manufacture similar products and if the government is helping the companies expand outside its borders, the companies will have access to low rate credit which can disrupt the market. For your investments it is important to understand the competition and where it is nipping or taking a bite of your company profits.

There are more questions than answers, till the next time – to raising questions.