After ASEAN Light Vehicle (LV) sales dropped for two consecutive years in 2023 (-1% year-on-year (YoY) and 2024 (-5% YoY), the downward trend continued in January 2025 with a decline of 8% YoY, due to weak performances in the region’s three largest markets: -11% YoY in Indonesia, -10% YoY in Thailand, and -24% YoY in Malaysia. In contrast, LV volumes in Vietnam and the Philippines increased by 22% YoY and 11% YoY, respectively.
In Vietnam, the outstanding sales performance was due to the low base in January 2024 and strong economic growth. GDP growth reached 7.6% YoY in Q4 and 7.1% for full-year 2024, driven by exports, manufacturing, and foreign investment inflows. The tourism sector rebounded strongly, too, with the number of foreign visitors returning to pre-pandemic levels. On the domestic front, the property sector is continuing to recover from the bursting of the bubble in 2023.
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A key development for the Vietnamese market is that the government enacted Decree No. 51/2025/ND-CP on March 1, 2025, which stipulates that it will continue to waive registration fees for Battery Electric Vehicles (BEVs) until February 28, 2027. This initiative is intended to motivate more consumers to consider purchasing Electric Vehicles (EVs) and is likely to be beneficial to VinFast, a Vietnamese EV manufacturer. It is noteworthy that in Vietnam, the registration fee represents a significant portion of the cost when buying a vehicle, with the percentage varying by location and vehicle type.
For the Philippines, the double-digit growth was supported by affordable Chinese models and strong remittance inflows from overseas Filipino workers (OFW). Based on media reports, remittance inflows increased by 3% YoY and hit an all-time high of $34.5 billion in 2024. Note that remittance inflows from OFW accounted for 8.3% of the Philippines’ GDP in 2023. Despite these developments, no significant changes have been made to the country’s sales outlook.
In addition, both positive and negative factors continue to play a role in the Philippines’ LV market. On the positive side, the government is preparing a new automotive policy called Revitalizing the Automotive Industry for Competitiveness Enhancement (RACE), the full details of which will be officially announced in March or April. On the negative side, the economy and LV demand could be hurt by political instability after former President Duterte was arrested for crimes against humanity during his drug war period.
Looking ahead to February, our recent data indicated that Indonesian and Malaysian sales increased by 3% YoY and 2% YoY, respectively. The improvement in Indonesia was mainly supported by the 2025 Indonesia International Motor Show event from February 13-23. For the Malaysian market, Perodua and Chery Group were the main growth drivers, thanks to solid demand for the Myvi and Bezza from Perodua, and the newly launched Jaecoo J7 from Chery Group.
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By GlobalDataIn contrast, Thailand’s LV market remained weak and declined by 10% YoY in February, as tightened auto loans and high household debt continued to be key obstacles for new vehicle sales. Due to weak domestic sales and a cloudy global situation, there was speculation that carmakers and component suppliers would lay off staff to lower costs and maintain margins.
In order to support the local automotive industry, proposals to stimulate auto sales and production have been submitted, such as the scrappage of old vehicles program and increasing the credit guarantee cap for auto loans, particularly for locally-built Pickup Trucks. Currently, the state-owned Thai Credit Guarantee Corporation (TCG) caps loan guarantees at 30% of the vehicle price. The increase in credit guarantees is expected to lead the financial sector to relax auto loan approvals. It is worth noting that many Pickup buyers are self-employed and/or in the informal business sector, facing difficulties obtaining financing approval. We will keep an eye the development of these proposals.
Overall, the ASEAN 2025 sales outlook remains unchanged at 3.19 mn units: 835k units for Indonesia, 761k units for Malaysia, 593k units for Thailand, 500k units for the Philippines, and 499k units for Vietnam. However, the forecast carries downside risks due to global uncertainty, particularly the protectionist trade policies of US President Trump.
This article was first published on GlobalData’s dedicated research platform, the Automotive Intelligence Center.
