ASEAN sales down 11%

Posted by on 5 February 2015 | Comments

ASEAN’s (Association of Southeast Asian Nations) emerging vehicle market has reported a continued decline in the 3rd quarter of 2014. Sales recorded in the 6 main regions fell from 857,051 (in the same period of 2013) to 767,419.

Although Malaysia and Indonesia experienced an encouraging first half of the year, demand weakened after this period. However, sales in the regions smaller markets showed positive growth.

Below are some country specific stats:

Indonesia

New vehicle sales have declined by 5% (306,395 down to 291,632) in the 3rd quarter. The drop in demand has been put down to a reduced economic growth as well as stricter lending conditions. GDP growth in Indonesia has fallen from 6% last year to 5.2% in 2014. FDI growth has also slowed due to the restrictions sanctioned earlier this year on the export of iron ore, which has directly affected foreign investment in the countries mining sector. The presidential elections have also contributed to the widespread policy uncertainty.

However, after years of promising growth, the vehicle market looks saturated based on present levels of economic growth. The introduction of cheaper and smaller cars by the government’s low cost green car (LCGC) programme has helped slightly boost sales in the first 9 months of 2014, at an increase of 2.7%. From January to September 2014, LCGC sales reached 127,460 units in comparison to the 8,500 units sold the previous year. However, sales of conventional light passenger vehicles dropped by 12.7% in the same period, as did commercial vehicles with a recorded a downfall in sales of 4.8%.

New president Joko Widodo, who took office in October, is expected to implement a cut in fuel subsidies that will make more funds available for education, infrastructure and poverty prevention programmes. Interest rates could increase putting more pressure on household budgets.

In summary, further growth in vehicle sales in Indonesia will become exceedingly difficult without a considerable increase in the rate of economic growth.

 

Thailand

New vehicle sales have declined by 29.8% (295,153 down to 207,205) in the 3rd quarter of 2014, on top of which, 9 month sales fell by 37% compared to the previous year. The 2014 market has struggled due to the withdrawal of first time buyer incentives at the end of 2012 and the slowing economic growth caused by political unrest. 2nd quarter GDP growth was 0.4% year-on-year and subsequently, 3rd quarter growth is expected to increase slightly.

With the significant increase of household debt, domestic consumption of new vehicles has been weak. Manufacturing output decreased by 1.6% in the 2nd quarter as limited export growth did not have the power to offset the lack of domestic demand. Thailand is also experiencing political unrest and has had a negative affect on the tourism sector (tourist arrivals fell by 12%), which accounts for about 10% of GPD.

Sales for 2014 are predicted to come in at 880,000 – 900,000 units. Public spending is expected to help drive GDP growth next year but the road to recovery will be slow.

 

Malaysia

New vehicle sales have once again dropped, this time by 8.8% to 159,163 units in the 3rd quarter of 2014, according to data gathered by the Malaysian Automotive Association (MAA).

This decline occurred during a period of accelerated economic growth, which reflected strong consumer confidence and a rise in employment levels. Vehicle sales in the first 9 months of 2014 improved by less than 1% to reach 492,305 units, potentially reflecting market saturation after a few years of continued growth. Buyers waiting for the upcoming launch of two new models, the Proton Iriz and the Perodua Axia, may have contributed to this, as well as the possibility of tax cuts in the 2015 state budget.

The introduction of the Perodua Axia and Proton Iriz will help 4th quarter sales grow, with full year figures expected to come in at around 670,000 units. Economic growth forecasts have also been upgraded during the last quarter at a predicted GDP growth of between 5.6 – 6 % for 2014.

 

 Vehicle sales in the ASEAN region by market, 2011-14

 

2011

2012

2013

2013(1-9)

2014(1-9)

% ch

Indonesia

893,164

1,116,230

1,229,901

908,330

932,943

2.7

Thailand

794,091

1,436,335

1,325,079

1,034,199

648,116

-37.3

Malaysia

600,123

627,753

655,793

487,970

492,305

0.9

Philippines

162,413

182,779

211,000

148,381

188,920

27.3

Vietnam

110,938

80,652

96,692

67,326

90,834

34.9

Singapore

35,904

33,914

27,374

22,677

30,284

33.5

Total

2,596,633

3,477,663

3,545,839

2,668,883

2,383,402

-10.7

 

 

 

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