MALAYSIA REPORT
New vehicle sales in the six major Southeast Asian countries in the first six months of 2024 fell 9% year-on-year to about 1.49 million units, the lowest level since 2021, when they were battered by COVID-19. Malaysia, which has benefited from strong domestic demand, is closing in on Indonesia, the largest market in the region.
Malaysia grew by 7% to 390,296 units. Sales growth was driven by strong domestic demand linked to economic growth. Sales of domestically produced small cars such as the Proton and Produa were particularly strong. In contrast, sales in Indonesia, the region’s largest market, fell 19% to 408,012 units due to a decline in the use of car loans and other factors caused by high policy interest rates. Thailand was down 24% to 308,027 units; Vietnam was down 2% to 134,884 units and the Philippines was up 10% to 227,225 units.
It is unusual for Malaysia and Indonesia, which were about 140,000 units apart in the same period last year, to be so close in sales. Malaysia has a population of approximately 33.5 million, one-eighth that of Indonesia.
Source: The Nikkei
PSR Analysis: As noted in the original article, it remains to be seen whether Malaysia will continue to increase its sales volume in the future. Although domestic demand is strong, government plans to remove subsidies that suppress gasoline prices by the end of this year may lead to slower growth in new vehicle sales. The Malaysian Automobile Manufacturers Association has also lowered its annual sales forecast to 765,000 units, down 4% from a record high in 2023.
The Indonesian Automobile Manufacturers Association (Gaikindo) expects the Indonesian market to recover in the second half of the year and beyond and is likely to remain the largest market in the region.
In Thailand, sales are slowing due to a decline in the use of car loans because of a higher household debt ratio. While Japanese automakers are struggling, EV subsidy policies are boosting EV sales, and Chinese automakers such as BYD are beginning to increase their market share. The balance of power in the Southeast Asian auto market is constantly shifting. PSR
Akihiro Komuro is Research Analyst, Far East and Southeast Asia, for Power Systems Research
