New vehicle sales in the ASEAN region’s six largest markets increased by 13.4% to 707,798 units in the third quarter of 2011, from 624,073 units a year earlier, according to data compiled by Tony Pugliese.
The markets in the region benefited from improving product supply as vehicle manufacturers affected by the Japanese earthquake and tsunami in March gradually overcame the subsequent component supply-chain disruption.
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Cumulative sales for the nine-month period amounted to 2,007,587 units, 10.8% higher than the 1,811,996 units sold in the same period of last year. The regional market was led by Indonesia and Thailand, with sales growth in excess of 20% in the first nine months of the year to new record levels.
Vietnam was the only other market to report positive growth, with deliveries up by just 3.2%. Sales in Malaysia were just slightly lower, while in the Philippines sales are estimated to have fallen by 7%. In Singapore, where the vehicle market is strictly controlled by the government, sales dropped by almost 29%.
The fourth quarter will be a difficult one for the region’s markets. The turmoil in the global financial markets has begun to affect sentiment, although governments have started to respond by loosening monetary policy.
Thailand
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By GlobalDataThe floods in Thailand are expected to have a negative effect on domestic sales for at least two months, until well into November, as manufacturers once again struggle to overcome a severe natural disaster. Honda has been the worst affected, with domestic and export sales likely to suffer in the fourth quarter.
There is still significant pent-up demand in Thailand and new first-time buyer incentives launched by the government in October will help underpin sales.
Regional sales are expected to exceed 2.6m units in 2011, at least 4% higher than in 2010, with Thailand and Indonesia increasing their dominance.
Thai vehicle sales increased by over 28% to 238,158 units in the third quarter of 2011, from 186,151 units a year earlier, as vehicle production recovered from the supply-chain disruption in the second quarter caused by the devastating earthquakes and tsunamis in Japan in March.
Cumulative sales in the first nine months of the year increased by over 20% to 670,970 units, despite an almost 5% decline the in the second quarter as vehicle manufacturers struggled to overcome component shortages.
Thai vehicle manufacturers once again are experiencing severe disruption to their operations as a result of a natural disaster. Severe flooding in the country’s northern and central regions brought vehicle output to a halt in October, with a large number of industrial estates across the country have been inundated by floodwaters.
Disruption to logistical and supply-chain networks will likely last until well into November, as will damage and disruption to dealer networks in the affected areas. The floods are expected to have a significant impact on full-year GDP growth, with economic output and exports disrupted by the floods.
For the vehicle market, there was already significant pent-up demand from the supply shortages of the second and third quarters. This is unlikely to improve until well into 2012.
The fourth quarter is traditionally peak sales season for the vehicle market, with the international motor show in Bangkok at the end of November normally providing the final sales push of the year. For many car companies it may come too soon, as they focus on damage limitation and restoring operations.
Full-year sales are likely to reach a record 860,000 units this year, even with a 20% drop in sales in the fourth quarter. The government’s first-time vehicle buyer incentive programme is likely to help support sales, although most sales will likely come through in 2012.
Indonesia
New vehicle sales in Indonesia picked up momentum in the third quarter of 2011, with total industry volumes rising by over 20% to 240,199 units compared with 199,537 units a year earlier.
Market growth had slowed markedly in the second quarter as key vehicle manufacturers struggled to maintain normal operations in the wake of Japan’s earthquake in March.
In the first nine months of the year, vehicle sales increased by over 18% to 657,886 units, from 556,239 units in the same period of last year.
The Bank of Indonesia responded to the growing unease caused by the recent turmoil in financial markets by reducing interest rates by 25 basis points to 6.5%, thus providing additional liquidity to the domestic economy.
The economy has been affected in recent months by falling export orders due mainly to weakening demand in Europe, as well as lower revenues from falling commodity prices. Weak export earnings will likely continue for some time, as heavily indebted western economies struggle to deleverage.
The industry is optimistic that the domestic market will continue to grow in the fourth quarter, as more pent-up demand is fulfilled and as buyers are drawn in by lower interest rates. Full-year sales will likely exceed 850,000 units this year.
Malaysia
New vehicle sales in Malaysia improved marginally in the third quarter of 2011 to 153,041 units, from 152,134 units a year earlier, according to data released by the Malaysian Automotive Association (MAA).
The supply-chain situation in Japan continued to improve in the third quarter, allowing affected manufacturers to lift output. Offsetting this was further monetary tightening in the third quarter and increasing economic uncertainty due to the global financial turmoil, however.
Cumulative sales for the first nine months of the year were down slightly, at 450,244 units compared with 453,249 units a year earlier.
The outlook for the fourth quarter is for weakening economic growth, with exports impacted by falling end-user demand in the West and from weaker prices. Full-year GDP growth has been broadly revised down to 4.5-5.0%, from 5.0-5.5% just a couple of months earlier.
Domestic sentiment has remained stable so far, helped by falling inflation and the potential for rate cuts which has so far offset growing unease about the global economy. Fourth-quarter sales will likely weaken further moderately, with full-year sales likely to come in at just below the 600,000-mark.
Tony Pugliese
Vehicle sales in the ASEAN region by market, 2008-11
| 2008 | 2009 | 2010 | 1/9/2010 | 1/9/2011 | |
|---|---|---|---|---|---|
| Thailand | 615270 | 548871 | 800367 | 556359 | 670970 |
| Indonesia | 607805 | 483548 | 764710 | 556239 | 657886 |
| Malaysia | 548115 | 536905 | 605156 | 453249 | 450244 |
| Philippines | 124449 | 132444 | 170216 | 129901 | 120746 |
| Vietnam | 111946 | 119868 | 112796 | 78180 | 80678 |
| Singapore | 108478 | 76397 | 47839 | 38068 | 27063 |
| Total | 2116063 | 1898033 | 2501084 | 1811996 | 2007587 |
Sources: www.AsiaMotorBusiness.com from industry sources.
