Growth slows further in Q4

2017 was another year of growth for vehicle sales in SE Asia, though national market performances varied considerably

2017 was another year of growth for vehicle sales in SE Asia, though national market performances varied considerably

New vehicle sales in southeast Asia's six largest markets increased by 4.4% to an estimated 3,385,552 units in 2017, from 3,242,880 units in 2016, according to data collected exclusively for just-auto by AsiaMotorBusiness.com.

The data includes some estimates for imported vehicles in the Philippines, which are not covered by the mainstream trade associations in that country.

Regional sales are estimated to have expanded by just 1.4% in the fourth quarter, with weakening demand in Indonesia, Malaysia and Vietnam offsetting strong growth elsewhere.

Sales in the region's largest market, Indonesia, deteriorated further in the fourth quarter, resulting in growth of just 1.6% to 1,079,300 units over the full year. The country's economy struggled to growth much above 5% last year, despite a recovery in exports, higher commodity prices and rising investment.

Sales in Thailand continued to strengthen in the fourth quarter - with volumes rising by over 18% year-on-year to 250,780 units – allowing the market to post its first full-year increase after four years of decline.

Malaysia's vehicle market continued to deteriorate in the fourth quarter, with sales falling by 6.7% to 150,924 units despite accelerating economic growth in the country throughout the year - driven by a rebound in exports, higher commodity prices and rising investment. Full-year sales were 0.6% weaker last year at 576,635 units in 2017, after a 13% decline in 2016.

The region's smaller vehicle markets also put in a mixed performance in the fourth quarter, with Philippine sales continuing to grow strongly even after four years of unprecedented growth. Fourth-quarter sales here were lifted by a rush to buy vehicles ahead of proposed changes to the excise tax rate.

Sales in Vietnam declined by almost 17% year-on-year in the fourth quarter, resulting in an almost 8% full-year decline to 250,619 units as the market digests the explosive growth of the previous four years.

Sales in Singapore jumped by close to 23% to 31,959 units in the fourth quarter, raising full-year sales by almost 9% to 116,148 units, with the market continuing to benefit from low registration taxes.

Indonesia

Indonesia's new vehicle market continued to decline in the fourth quarter of 2017, by 1.4% to 275,540 units from 279,860 units a year earlier, according to data released by industry association Gaikindo.

A strong rebound in commercial vehicle sales from a four-year slump was not enough to offset weakening demand for passenger vehicles in the country.

Overall vehicle sales were up by just 1.6% at 1,079,300 units last year from 1,062,700 units in 2016, underpinned by strong gains made earlier in the year. Low interest rates and deep discounting were unable to entice more customers to the market in the second half of the year, with a slower new product cycle also contributing to declining interest in the sector.

Lenders have become more cautious and overall consumer spending has become increasingly sluggish. Economic growth remained moderate last year at just over 5%, despite a recovery in exports, higher commodity prices and rising investment.

Bank of Indonesia (BI) left its benchmark interest rate unchanged at 4.25% in the January meeting, but said it would relax further its bank reserve requirements to help drive up lending this year.

Gaikindo's secretary general Kukuh Kumara said he expects only a moderate sales rise this year to 1.1 million units, supported by regional elections to be held across the country this year.

Among the new models that will enter the market in 2018 are replacements for the Toyota Rush and Daihatsu Terios SUVs; the Datsun Cross; a new MPV from SGMW Motor (Wuling); and new versions of the Suzuki Ertiga.

Thailand

Thailand's new vehicle market continued to strengthen in the fourth quarter, with sales rising by 18.1% to 250,780 units from 212,263 units a year earlier, according to wholesale data collected by the Federation of Thai Industries (FTI).

The market has finally recovered 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.

Full-year sales increased by 13.4% to 871,650 units in 2017 - way ahead of industry forecasts - with demand accelerating markedly in the second half of the year.

Growth last year was driven by strong demand for passenger vehicles thanks to new model launches and the end of the lock-in period for tax rebates to vehicle buyers under the government's first-time buyer scheme over five years ago.

The FTI and carmakers such as Honda are forecasting only a moderate rise in sales this year to 900,000 units, while Mazda is more upbeat – predicting 920,000 units.

Malaysia

Malaysia's new vehicle market continued to decline in the fourth quarter of 2017, with sales falling by 6.7% to 150,924 units from 161,847 units a year earlier, according to data released by the Malaysian Automotive Association (MAA).

Over the full year the vehicle market suffered another decline – albeit of just 0.6% to 576,635 units after a 13% decline to 580,124 units in 2016, despite improving economic conditions in the county.

The country's GDP expanded by 6.2% in the third quarter of 2017, up from 5.7% in the first half of the year and 4.5% in the whole of 2016. The stronger growth was driven by a rebound in commodity prices, a recovery in exports and higher investment in the country.

The MAA expects only a slight improvement in sales in 2018, of 2.3% to around 590,600 units, thanks to strong global economic growth and low interest rates.

Vehicle sales in the ASEAN region by market, 2014-17

2014201520162017% change
Indonesia12080191013300106270010793001.6
Thailand88183279959276878887165013.4
Malaysia666465666674580124576635-0.6
Philippines2703723468654527514912008.5
Vietnam133588208568271833250619-7.8
Singapore42980745441066841161488.9
Total32032563109543324288033855524.4

Source: www.AsiaMotorBusiness.com from industry sources

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