Thailand May Become New Car Sales Leader in 2019
New car sales from January to June in six major countries in Southeast Asia were 1.7 million, unchanged from the same period of the previous year.
Thailand and Indonesia are the two major markets. Thailand, where consumption is strong, increased by 7% year-on-year, while Indonesia, which faces a decline in resource prices, decreased by 13%. Thailand could be ranked first this year for the first time in six years.
In Thailand, new car sales in January to June increased 5% year on year to 520,000 units. This is the highest level since 2012 and 2013 when sales increased as a result of tax cuts for people who purchased cars for the first time. Demand for replacement by those who bought a car at that time is supporting present sales. If this pace continues, it is expected to exceed 1 million units for the second consecutive year.
In contrast, Indonesia is weak. New car sales in January-June decreased by 13% to 480,000 units, and there is a concern that it will fall below 1 million for the year.
Indonesia has maintained its position as the largest market in Southeast Asia since 2014, but it could be overtaken by Thailand. The reason for the slump was the fall in prices of export coal and palm oil. Coal has dropped nearly 30% since the beginning of the year. The price of cars is on an upward trend due to the weak currency.
The Southeast Asian market accounts for 60% of its sales from Thailand and Indonesia. In both countries, Japanese car manufacturers have large factories, and Japanese brands each share around 90%.
Source: The Nikkei Read The Article
PSR Analysis: The automobile industry in Southeast Asia is treated as a key industry in many countries, and it plays an extremely important role in driving its own manufacturing industry. And in many countries the automotive industry is undergoing a major change.
Although not mentioned in the source article, VINFAST, the first domestic brand in Vietnam, has finally announced a new car. Malaysia already has its own brands of Proton and Produa, but the government announced that it will create a new third national car brand with the aim of improving its technical capabilities and expanding employment.
Indonesia and Thailand are the best of Southeast Asia and are in a position to lead the region.
This year and next year will be almost flat or show a slight increase due to the influence of trade friction between the US and China. However, regional supply chain development and industrial maturity, which do not appear in the unit volume statistics, are steadily evolving year by year. You should not see Southeast Asia in the temporary economic ups and downs. Vulnerability is undeniable, compared to developed countries, but the abundant workforce and enthusiasm are supporting their automobile industry. PSR
