New vehicle sales in the ASEAN region’s six largest markets grew by 24% to 697,337 units in the first quarter of 2011, from 562,203 units a year earlier, according to data collected from industry sources across the region.

The region’s main markets posted new record highs during the quarter, with only Singapore reporting continued demand weakness. 

March was a particularly strong month for most markets in the region, as buyers moved to lock in interest rates ahead of possible hikes. With sales dominated by Japanese brands, last month’s devastating earthquakes in Japan may also have encouraged buyers to rush in to secure purchases ahead of possible stock shortages and price increases.

Economic growth across the region remained strong during the quarter, with consumer and business confidence at a high in most markets. While inflation has strengthened in recent months, some central banks so far have been reluctant to raise interest rates significantly for fear of derailing the current growth momentum.

Also helping economic growth is the continued strong demand for exports, despite demand weakness in some key overseas markets, particularly in Europe.

The industry remains upbeat about the full-year outlook, although it has yet to fully evaluate the ongoing disruption caused by last month’s earthquake and tsunami in Japan. Prior to these events, ASEAN sales had been expected to rise to around 2.75m units this year.

But with key suppliers such as Toyota, Daihatsu, Honda and Nissan severely affected by supply chain disruption and power outages in Japan, the full-year total could ultimately be much lower this year. Most ASEAN markets are expected to be negatively affected from the second quarter of the year. Key will be whether lost production can be recovered later in the year.


The Thai vehicle market expanded by over 43% year-on-year to 238,619 units in the first quarter of 2011, a new quarterly high for the market. The continued strong sales growth reflects a robust economy, helped by strengthening domestic consumption and higher exports. 

Sales in March expanded by 47.5% to 90,003 units – also a new monthly high for the market. Buyers rushed to lock in interest rates ahead of likely hikes by the Bank of Thailand, as well as in anticipation of possible inventory shortages as a result of supply-chain disruption in Japan. 

The Bank of Thailand again hiked interest rates earlier this month, by 25 basis points to 2.75% earlier this month. This compares with a low of 1.25% in 2008, at the height of the global financial crisis. Prices of raw materials, energy and food continue to rise, however, and are a growing threat to domestic economic growth.

Despite expectations of further hikes in interest rates, GDP growth this year is widely forecast to reach 3.5-4.0% this year. There is significant momentum in the economy, with consumer and business confidence at a high level.

The Federation of Thai Industries is optimistic that the market can grow further this year, by around 10% compared with last year’s record 800,000 units. The biggest threat appears to be component supply disruptions caused by last month’s earthquakes in Japan, with vehicle manufacturers having already announced significant production cutbacks.


New vehicle sales in Indonesia rose by 29.5% to 225,413 units in the first quarter of 2011, a new quarterly high for the market, according to data released by automotive manufacturers’ association Gaikindo. 

Sales of passenger vehicles increased by 50.7% to 541,475 units, while commercial vehicle sales grew by 79.8% to 223,235 units. A further 400 heavy trucks are estimated to have been sold in this period, mostly for mining and container haulage applications. 

The Indonesian economy continues to steam ahead, with domestic consumption continuing to be fuelled by low interest rates. Bank of Indonesia has increased interest rates by just 25 basis points from their crisis low of 6.5%. The rupiah also has strengthened significantly since the end of 2010, which has helped keep inflation in check.

First-quarter GDP growth is estimated at over 6% year-on-year, after expanding by 6.9% in the fourth quarter of 2010.  Inflation remains a problem and further rate hikes are very likely this year, to over 7% at least by year end.

March was also a record-breaking month for the market, with sales rising by 25.2% to 82,058 units, from 65,555 units a year earlier. Buyers have been locking in deals ahead of possible interest rate hikes, as well as securing purchases ahead of likely delivery delays.

Gaikindo has reduced its full-year forecast to 800,000 units, from 850,000 units, citing uncertainties due to probable disruption in Japan. The passenger vehicle market is dominated by Toyota and Daihatsu, which have been severely affected by devastation in Japan.


New vehicle sales in Malaysia rose by 7.6% to 155,165 units in the first quarter of 2011, from 144,147 units a year earlier, according to data released by the Malaysian Automotive Association (MAA). 

Sales in March rose by 12.7% to 63,265 units, as buyers brought forward purchases in anticipation of possible stock shortages resulting from month’s earthquakes in Japan. Passenger car sales rose by 11.8% to 56,483 units in March, from 50,533 units a year earlier, while commercial vehicles sales rose by 20.9% to 6,782, from 5,606 units.

The country’s economy continued to grow strongly, driven by strong domestic consumption and continued recovery in exports. GDP growth is widely expected to be in the region of 5.5% this year. Bank Negara’s overnight interest rates, at 2.75%, remain mid-way in the current cycle, and a hike is overdue given the country’s strong price inflation.

Higher interest rates and other bank tightening measures, and the potential for supply disruption, are the main threats to further market growth for the rest of the year. Malaysian consumers are carrying high levels of debt and the market is increasingly overbought at current levels. The MAA earlier this year forecast the market to reach a new record of 618,000 units this year, but uncertainty is mounting.

Vehicle sales in the ASEAN region by market, 2008-11





1-3 2010

1-3 2011











































Sources: from industry sources.