JULYASIA BUSINESS OUTLOOK8NEWSROOMTOKIO MARINE & SOMPO COLLECTIVELY OFFLOAD HONDA SHARES WORTH JPY 535BChina's BYD inaugurated its first electric vehicle plant in Southeast Asia, located in Thailand, on Thursday, July 4. This marks a significant milestone for the automaker as it solidifies its dominant position in the region's rapidly growing EV market. During the opening ceremony, BYD CEO and president Wang Chuanfu highlighted Thailand's progressive stance on EVs, stating, "Thailand has a clear EV vision and is entering a new era of auto manufacturing. We will bring technology from China to Thailand."The establishment of the BYD plant is part of a broader wave of investments from Chinese EV manufacturers, totaling over $1.44 billion, facilitated by Thai government subsidies and tax incentives. This investment wave reflects the strategic shift of Chinese automakers towards expanding their footprint in Southeast Asia. Following the announcement, BYD's Hong Kong-listed shares saw a notable increase, rising 3.2 percent to HK$237.60, marking their biggest intraday jump since June 13.Thailand aims to transform 30 percent of its annual vehicle production, which stands at 2.5 million units, into EVs by 2030 as part of its ambitious government plan. Traditionally a regional auto assembly and export hub, Thailand has been dominated by Japanese carmakers such as Toyota Motor, Honda Motor, and Isuzu Motors. However, the entry of BYD signifies a shift in the automotive landscape. Japanese financial groups, including Tokio Marine, Sompo, and two units of MS&AD, will sell Honda Motor shares worth 535 billion yen ($3.3 billion) to unwind cross-shareholdings, according to a regulatory filing on Thursday. Mitsubishi UFJ and Mizuho, Japan's first- and third-largest financial groups, also plan to join the sale, reflecting the increasing pace of unwinding cross-shareholdings as part of Japan's corporate governance reforms. Reuters had reported the insurers' plans earlier in the week.Cross-shareholding, where companies hold shares in each other, has traditionally reinforced business ties in Japan. However, governance experts and foreign investors criticize this practice for leading to lax governance by shielding management from shareholder accountability. The secondary share offering, involving 10 financial institutions, will amount to 300 million shares, including over-allotment, though the price is yet to be determined. Honda's shares closed at 1,791 yen on Thursday, valuing the offering at about 535 billion yen.The four non-life insurers, which include MS&AD Insurance subsidiaries Mitsui Sumitomo Insurance and Aioi Nissay Dowa, previously committed to reducing their entire cross-shareholdings to zero within a few years following a price-fixing scandal last year. Honda has announced plans to buy back up to 300 billion yen's worth of its own shares during the current financial year, though no further share buyback was announced on Thursday. Honda was one of the top five cross-shareholding companies for the insurers, except for Aioi Nissay Dowa Insurance, as per securities filings in March. BYD OPENS FIRST EV FACILITY IN SEAJULYASIA BUSINESS OUTLOOK8
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