New vehicle sales in South-east Asia's six largest markets increased by 10.5% to 823,565 units in the first quarter of 2017, from 745,242 units in the same period of the previous year, according to data collected by AsiaMotorBusiness.com exclusively for just-auto.
This follows growth of just over 4% to 3,240,180 units last year, with the performances of the individual markets mixed. In the first quarter of 2017, all markets made moderate to strong gains.
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Economic growth across the region picked up momentum in the first quarter, particularly in markets which under-performed last year – such as Malaysia and Thailand. Exports rebounded strongly, helped by a recovery in some commodity prices, and infrastructure spending has been stepped up.
Local currencies have been more stable against the US dollar compared with last year, which has helped underpin consumer and business confidence.
The region's largest vehicle market, Indonesia, saw first-quarter sales rise by 6% to 283,300 units – helped by low interest rates and the launch of important new models over the last 18 months.
Sales in Thailand rebounded strongly in the first quarter, by 16% to 210,490 units, after a negative fourth quarter of last year. The market looks to be finally recovering from a four-year slump, helped by new models and the end of the lock-in period for tax rebates for those who bought under the government's first-time buyer scheme over five years ago.
Malaysia's vehicle market also performed positively in the first quarter, reflecting a pick-up in economic activity as exports rebounded along with a recovery in some commodity prices.
The region's smaller vehicle markets continued to perform positively in the first quarter, albeit with slower growth compared with previous years. The Philippine vehicle market remained strong, however, with first-quarter volumes rising by over 22% to 102,867 units as the domestic economy continues to power ahead.
Sales in Vietnam grew by just 6% in the first quarter, after three years of strong outperformance, while sales in Singapore continued to benefit from low registration taxes.
Indonesia
Indonesia's new vehicle market expanded by 6% to 283,326 units in the first-quarter of 2017, from 267,304 units in the same period of last year, according to data released by industry association Gaikindo.
This follows a 4.9% sales rise last year to 1,062,700 units after a two-year slump – driven by new models and falling interest rates. The central bank cut its benchmark rate on several occasions last year, from 7.25% in January to 4.75% in October.
Annual GDP growth is estimated to have picked up slightly in the first quarter, to around 5.2%, helped by a recovery in exports and continued domestic consumption growth.
New models from key manufacturers such as Toyota, Honda, Daihatsu and Mitsubishi have helped drive the overall market forward over the last year. Mitsubishi and its local partner PT Krama Yudha opened a new light vehicle plant this week in Bekasi, just east of the capital Jakarta, to target the country's substantial compact MPV, SUV and light commercial vehicle segments.
Gaikindo said it expects the domestic vehicle market to continue to grow moderately this year, with full-year sales forecast to rise by 4% to 1.1 million units.
Thailand
New vehicle sales in Thailand rebounded strongly in the first quarter, by almost 16% to 210,490 units from 181,560 units a year earlier, according to wholesale data collected by the Federation of Thai Industries (FTI).
The market looks to be finally recovering from four straight years of decline, which culminated in a 4% drop to 768,788 units last year compared with peak volumes of 1.43 million units in 2012.
First-quarter sales were lifted by new passenger vehicle models and by the end of the lock-in period for tax rebates for those who bought under the government's first-time buyer scheme over five years ago.
GDP growth last year was 3.2%, reflecting moderate consumer spending growth and weak exports. Growth in the fourth-quarter dipped to 3.0%, as the country went into mourning following the loss of King Bhumibol Adulyadej in October.
Domestic economic growth gained significant momentum in the first quarter of 2017, with consumer spending and exports both rebounding strongly. Full-year GDP growth is now expected to exceed 3.5%.
At the beginning of the year the FTI forecast full-year sales to rise by around 4% to 800,000 units, but it may revise upwards these estimates following the market's strong first-quarter performance.
Malaysia
Malaysia's new vehicle market also rebounded strongly in the first quarter, with sales rising by over 7% to 140,839 units from weak year-earlier sales of 131,251 units, according to data released by the Malaysian Automotive Association (MAA).
This follows a 13% sales drop to 580,124 units last year, from peak volumes of 666,674 units in 2015, reflecting a sharp fall in the country's economic growth rate. GDP growth is estimated at 4.2% last year, down from 5.0% in 2015 and 6.0% growth in 2014.
The economy looks to have bottomed out in 2016, however, with growth estimated to have picked up to around 4.5% in the last two quarters – helped by improving exports and strong growth in manufacturing and construction sector output. A rebound in some commodity prices also helped lift rural incomes in the first quarter.
The MAA expects only a slight improvement in sales in 2017 to around 590,000 units. Government institutes expect economic growth to be maintained at least at current levels throughout the year, helped by a more stable currency and stronger external demand.
