Vehicle sales in south-east Asia's six largest markets rose sharply in the first quarter of 2008, despite weakening global economic growth, declining stock markets and a sharp rise in inflation.

Sales in the region's main markets jumped by 29.2% to 517,122 units, with Vietnam and Indonesia leading growth with gains of 180% and 60% respectively.

Vehicle sales in Thailand rose by over 16%, with the December elections restoring some confidence and measures to boost sales of cars compatible with bio-fuels helping to reverse two years of decline.

Malaysia and the Philippines also reported strong growth, while Singapore was the only major ASEAN market to show a decline, pushing it down to sixth place behind Vietnam and the Philippines.

Domestic economic growth in most south-east Asian countries remains strong, with strong momentum carried through from last year. The building sector is booming in many key markets and agricultural output has been buoyant.

The sustainability of recent growth levels remains in doubt, however, with inflation rising sharply and interest rate hikes increasingly likely in the region.

Furthermore, government budgets are coming under increased pressure as high oil prices push the cost of fuel subsidies higher and growth in export demand is also beginning to weaken. The IMF now expects GDP growth in the region's top five economies (excluding Singapore) to drop to 5.8% in 2008, compared with 6.3% in 2007.

While the auto industry remains upbeat about the region's full-year sales outlook, the risks are increasing and sales in key markets may slow in the second half.


After two years of decline, the Thai vehicle market improved significantly in the first quarter, by 16.3% year-on-year to almost 161,000 units. Consumer and business confidence was seen rising after last December's elections which saw the military government step down after 16 months in power.

The passenger car market rebounded strongly during the quarter, by over 39% to 52,447 units, with customers benefited from cuts in excise tax from 30% to 25% on cars compatible with bio-fuels.

Honda in particular enjoyed buoyant passenger car sales, with volumes rising by 46.3% to 22,437 units. The launch of the new Accord in January helped, as did strong demand of the Civic - its most popular model with close to 9,500 sales during the quarter. Pick up truck sales underperformed during the quarter, with a 7.4% rise to 89,898 units.

Toyota was the most popular brand with 67,012 sales during the quarter, to claim a market share of almost 42%. Isuzu sold 35,988 vehicles for a market share of 22.4%, and Honda claimed 13.9% of the market.

Toyota remains upbeat about the outlook for the market for the rest of the year, with a forecast of around 700,000 units - or 11% higher than last year. Inflation is an increasing risk to economic growth, however, as is the potential for lower export demand.


The Indonesian vehicle market continued to recover strongly in the first quarter, with deliveries to dealers rising by 60.2% to 135,387 units - making it the second-largest automotive market in the ASEAN after Thailand. Sales continued to be underpinned by strong domestic economic growth and benign interest rates of 8%.

Toyota sold 45,058 vehicles during the quarter, for a market share of 33.2%, with the Avanza remaining its best-selling model with 16,158 sales - followed by the Kijang Innova with 14,033 units. Daihatsu sold a further 15,032 units and Hino 3,053 commercial vehicles, giving the Toyota group a market share of 46.6%.

Mitsubishi sold 19,878 vehicles during the quarter, with the Canter light commercial vehicle range accounting for almost half its volumes. Suzuki followed closely with 18,706 sales, while Honda sold 12,789 units.

Indonesia has not been unaffected by rising energy and commodity prices and the government is widely expected to be forced into action in the second half of 2008. Inflation is expected to go into double-digit figures later in the year and interest are likely to be hiked to around 9%. Fuel subsidies are rising in response to higher oil prices and fuel price hikes also look increasingly likely later this year.

Vehicle sales in the ASEAN by market, 2004-08






1-3 2007

1-3 2008


















































Sources: Industry sources.



Malaysia's vehicle market recovery accelerated in the first quarter, with volumes rising by 24.6% to 130,774 units as domestic confidence continues to rise. In March, volumes were 20.2% higher year-on-year at 46,436 units, with passenger car sales rising by 21% to 42,547 and commercial vehicle sales up 12% to 3,889 units. Vehicle production rose by 44% during the quarter to 132,744 units.

In the first quarter, car sales reached 120,251 units, helped by strong demand for domestic models such as the BLM - the replacement for the Proton Saga and Iswara models, and continued strong demand for the Persona and Gen2.

The industry remains upbeat about the market's full-year prospects, with the Malaysian Automotive Association (MAA) forecasting domestic sales to reach 510,000 sales - 4.7% higher than in 2007. The government expects GDP growth of between 5-6% in 2008, with reported inflation in the region of 3% and interest rates at 3.6% - a level that should continue to stimulate domestic economic growth.

The Philippines

The Philippine vehicle market expanded by 10.3% in the first quarter of 2008 to 28,094 units, according to data released by the Chamber of Automotive Manufacturers of the Philippines (CAMPI). Passenger car sales expanded by 7.6% to 9,830 units and commercial vehicles sales by 11.3% to 19,074 units.

Light commercial vehicle sales outperformed strongly with a 21% increase thanks mainly due to strong SUV sales, which reached 10,923 units to account for more than one-third of the total vehicle market. Toyota sold 10,119 vehicles during the quarter, for a market share of 35%, followed by Honda with 4,034 units, Mitsubishi with 3,634 units, Hyundai 2,369 units and Isuzu 2,330 units.

The industry is optimistic that the market can build on its recent gains, with Toyota projecting overall sales to rise by 5% to around 124,000 units in 2008. CAMPI is more upbeat, forecasting a vehicle market of around 127,000 units this year. The Manila Motor Show held in early April is expected to help maintain the current market momentum.

But the economic risks are increasing, with inflation rising and exports in decline. The IMF earlier this month reduced its 2008 GDP forecast to 5.8%, compared with actual growth estimated at 7.3% last year. Inflation rose to 6.4% last month and exports have been in decline since February. High remittances from overseas workers and strong agricultural output are the main positives.


The Vietnamese vehicle market has risen to unprecedented levels in the last year, with sales exceeding 80,000 units in 2007 and 34,000 units in the first quarter of 2008 - putting it ahead of the Philippines. The market has been fuelled by above average growth in the domestic economy and by continued strong export growth. The commercial vehicle segment has underpinned much of the recent vehicle market growth, with the Hyundai and Kia joint ventures benefiting in particular.

The vehicle market is seen as inflated at present and is widely expected to pull back sharply in the second half. First-quarter sales were boosted by purchases brought forward in anticipation of tax increases on CKD imports in April. GDP growth is expected to slow to around 7.3% this year, from 8.7% in 2007. Further risk comes from inflation, which reached 16.4% in the first quarter, and weakening overseas markets.

Tony Pugliese