Auto Industry

Singapore surprise

Dyson chooses the Lion City for its car plant; China is the target market

James-Dyson-w

Electric dreams: James Dyson

Southeast Asian business groups run by the Chinese diaspora have always been influential in their ancestral home. Known as ‘the Bamboo Network’, they provided financial backing for China’s economic development after 1978 and their special status was a factor in 2002 when ASEAN was the first trade partner to get recognition after China gained membership to the World Trade Organization.

The pact paved the way for another key agreement between the Chinese and one of the bloc’s leading economies, Singapore, which saw 95% of the city-state’s exports to China exempted from tariffs.

So when British technology brand Dyson announced plans last week to assemble electric vehicles in Singapore, many claimed the reasoning was access to the China market, where sales of electric vehicles (EVs) are expected to boom.

The privately-held British firm, best known for its vacuum cleaners and bladeless fans, will get financial incentives from the Singaporean government, suggests Reuters. But the move is still a bold one, occurring nearly 40 years after the last car plant closed in the city.

So why not base production in China itself, where Tesla has chosen to build a huge new factory? Elon Musk’s firm recently secured an 860,000-square-metre plot of land from the Shanghai government for its first Gigafactory overseas (see WiC428).

Analysts reckon there are two further factors driving Dyson’s decision. First, it may be cautious about infringement of its intellectual property (James Dyson, the founder, has complained about IP theft in the past). Second, it may see Singapore as a more neutral location politically, especially in the current context of an increasingly bitter trade and tech war between China and the US.

Dyson has set aside £2.5 billion ($3.18 billion) for the venture, with the goal of building the first car powered by a solid state battery – technology that is lighter, cooler and faster-charging than lithium ion packs, reports the UK’s Autocar.

Dyson thinks its expertise in advanced motors will also give it an edge in designing and making electric cars. It is planning to produce three models initially, with China expected to account for the bulk of the sales.

James Dyson has said that his firm’s “centre of gravity” has already tilted toward Asia, which generated almost three quarters of its revenue growth last year, and sales have more than tripled in China over the previous four years.

About 35% of Dyson’s components are currently sourced from China, and then shipped to manufacturing plants in Malaysia and the Philippines.

Dyson has also established one of its research labs in Shanghai in 2017 – the city where its air purifiers sold best last year.

In a recent interview with China Daily, Dyson CEO Jim Rowan noted that China is now Dyson’s second largest market behind the United States, and that it had helped lift the company’s annual turnover by 40% to £3.5 billion in 2017.

“Even though we have managed robust sales in China so far, we’ve found that Chinese customers are incredibly inquisitive and hungry for information. They want to embrace new technologies and are fairly open to disruptive products,” Rowan said, adding that the company wants to increase its sales presence there to 1,000 outlets from the current 710 by 2020 – a year before the debut of its electric car.

In the meantime Dyson will be hoping that its electric cars make as many waves in China as its newly-launched hair curlers. The maiden range was introduced there last month and it instantly won plaudits from customers, selling out in a few seconds on third-party online stores despite a price tag of Rmb3,800 ($550). Netizens joked: “Soon Dyson EVs will go viral on the WeChat accounts of male users, just like its hair curlers have done for their girlfriends.”


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