Thailand and Indonesia drive growth
New vehicle sales in the ASEAN region’s six largest markets jumped by over 28% to 941,279 units in the first quarter of 2013, from 733,522 units a year earlier, as strong domestic economic growth continued to offset sluggish exports and weak commodity prices.
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Government and private sector investment is expanding, while consumer spending has been underpinned by low interest rates and hikes in minimum wages. The four largest vehicle markets – Thailand, Indonesia, Malaysia and the Philippines, all enjoyed strong, double-digit growth in the quarter.
Thai vehicle sales were particularly strong, with first-quarter volumes rising by over 48% to 412,680 units. The market continued to benefit from an overspill of orders from last year’s first-time buyer incentive programme, with buoyant domestic sentiment and strong economic growth also helping to drive growth.
The benefits of the Thai incentive programme are expected to run out in the second quarter and the high volumes seen in the second half of last year are unlikely to be sustained this year.
Indonesia continues to enjoy strong investment and domestic consumption, with first-quarter GDP growth expected to have exceeded 6%. The country’s fast-expanding middle-class population is underpinning long-term growth in vehicle demand, with low interest rates and a broadening range of lower segment vehicles helping to improve affordability.
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By GlobalDataMalaysia and the Philippines are also enjoying strong domestic economic growth and their respective vehicles markets continue to push towards new record levels. Malaysia’s first-quarter sales increased by almost 14% to 157,664 units, while Philippine sales jumped by close to 22% to 49,076 units.
Vietnam’s vehicle market is beginning to stabilise, with the government appearing to be gaining the upper hand in its battle against inflation. Interest rates have come down significantly over the last year, which is starting to lift economic growth. Automotive taxation remains very high, putting new vehicles out of the reach for many businesses and private buyers.
Thailand
New vehicle sales in Thailand jumped by 48% to 412,680 units in the first quarter of 2013, from 277,635 units a year, according to data released by the Federation of Thai Industries.
Vehicle manufacturers continue to fulfill orders for vehicles bought under last year’s first-time buyer incentive programme, which offered first-time buyers tax rebates of up to THB 100,000.
While most of these orders are expected to be fulfilled by the end of the second quarter, the domestic Thai economy continues to perform strongly. Consumer sentiment has been buoyed by recent hikes in minimum wages and salary increases awarded to civil servants.
The Thai Ministry of Finance has revised upwards its GDP growth forecast for this year from 5.0% to 5.4% in light of the strong economic activity of the first quarter and rising private sector and government investment.
Revised 4th quarter data shows the economy expanded by a better-than-expected 6.4% last year, boosted by government flood-recovery expenditure.
New vehicle sales are expected to weaken in the second half of the year, as the orders from last year’s incentives dry up and as year-earlier comparisons get tougher.
Indonesia
New vehicle sales in Indonesia continued to surge ahead, with first-quarter volumes rising by over 18% to 295,912 units, from 249,589 units a year earlier – according to data collected by the Gaikindo automotive industry association.
The market trend remains positive despite tighter lending after the Bank of Indonesia extended its minimum loan down-payments requirements (of up to 30%) to the country’s Sharya banking sector in January. Conventional banks were asked to increase their down-payment requirements in June last year.
Economic growth in the country remains strong, despite weak exports and low commodity prices. The domestic economy continues to enjoy strong consumer demand and rising inward investment.
First-quarter GDP growth is expected to have exceeded 6%, largely in line with last year’s growth of 6.2%. Bank of Indonesia’s benchmark interest rates have remained unchanged for over a year at 5.75%, which has helped stimulate growth.
Vehicle market growth is expected to slow in the second half of the year, as year-on-year comparisons get tougher. Full-year sales growth is expected to be in single digits, after the market’s strong performance in 2012.
Malaysia
Malaysia’s new vehicle market expanded by 13.8% to 157,664 units in the first quarter, from 138,544 units in the same period of last year, according to data released by the Malaysian Automotive Association (MAA).
The strong growth mostly reflects weak year-earlier data, when sales were held back by the introduction of new registration procedures and minimum down-payment requirements on loans. Last year’s volumes were also affected by a drop in CKD supplies from Thailand following the floods.
Nevertheless, the market continues to make progress, reflecting buoyant domestic sentiment and strong private and public sector investment. GDP is widely expected to be in the 5.0-5.3% range this year, despite sluggish exports and low commodity prices.
The MAA expects vehicle sales to reach 640,000 units this year, an increase of just over 2% on last year’s record 627,753 units. Year-on-year comparisons will get progressively tougher as the year plays out, with growth expected to slow significantly later in the year.
Vehicle sales in the ASEAN region by market, 2010-13
|
|
2010 |
2011 |
2012 |
1-3 2012 |
1-3 2013 |
% chge |
|
800,367 |
794,091 |
1,436,335 |
277,635 |
412,680 |
48.6 |
|
|
Indonesia |
764,710 |
893,164 |
1,116,230 |
249,589 |
295,912 |
18.6 |
|
Malaysia |
605,156 |
600,123 |
627,753 |
138,544 |
157,664 |
13.8 |
|
Philippines |
170,216 |
162,413 |
182,779 |
40,297 |
49,076 |
21.8 |
|
Vietnam |
112,224 |
110,938 |
82,416 |
18,467 |
19,025 |
3.0 |
|
Singapore |
47,839 |
35,904 |
33,914 |
8,990 |
6,922 |
-23.0 |
|
Total |
2,500,512 |
2,596,633 |
3,479,427 |
733,522 |
941,279 |
28.3 |
Sources: www.AsiaMotorBusiness.com from industry sources.
