ASEAN: Thailand accelerates EV production; new plants to be built in Malaysia and Vietnam

ASEAN reaches record sales in 2018, recession may reduce demand and exports

2019/03/13

Summary

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  New vehicle sales in ASEAN’s six major countries increased by 5.5% year-over-year (y/y) to 3.45 million units in 2018, surpassing the previous year’s level for three consecutive years and exceeding former record sales in 2013. Indonesia and Thailand enjoyed expanded vehicle sales thanks a recovery in the economy. In Malaysia, sales grew during a three-month tax holiday implemented by the new administration, but total 2018 sales increased only slightly as sales fell after the tax holiday ended. In Vietnam, although imports of completely built units (CBU) decreased due to the non-tariff barriers set by the new decree, overall sales increased owing to higher demand. At the same time, the Philippines experienced reduced sales as consumers rushed to buy cars prior to the excise tax reform in January 2018 and sales continued to fall through the second half of 2018. Vehicle sales in Singapore also decreased. Automobile manufacturers associations in Indonesia, Thailand and Malaysia forecast that 2019 sales in the ASEAN market are expected to remain the same level as 2018 as economy in the region will slow down due to the effect of higher interest rates since last year and reduced exports to China due to the US-China trade frictions and China’s economic downturn.

  Vehicle production in ASEAN’s four main countries grew by 8.5% y/y to 4.16 million units in 2018, posting the second-highest volume behind the level in 2013. Thai production recovered to exceed two million units for the first time in five years thanks to increased demand in the country. Indonesia built more than 1.3 million units for the first time with increased production for exports. Output in Malaysia also grew by 13.1% y/y to 560,000 units. Among four countries, only the Philippines saw reduced production due to a drop in domestic sales. LMC Automotive forecasts that ASEAN’s production in 2019 will be slightly less than the previous year’s volume.

  Recently, various ASEAN countries are setting up measures to promote production and sales of electrified vehicles along with the recent global shift toward EVs in the automotive industry. The Thai government accepted applications for its incentive programs for electric vehicle production by the end of December 2018, and approved Toyota, Nissan, Honda and Mazda for HV, Mercedes-Benz, BMW and SAIC-CP for PHV, and FOMM for EV production investment projects. The Thai government also approved the projects to produce batteries and establish charging stations.

  In the ASEAN market, mobility services such as ride sharing services are expanding. Grab, a leading ride-hailing service operator, has integrated Uber’s operations in Southeast Asia into its own business in April 2018. Toyota has invested USD 1 billion and Hyundai Motor Group has invested a total of USD 275 million in Grab in 2018. Meanwhile, Google, Temasek and Tencent have invested in another leading ride-hailing service platform GO-JEK based in Indonesia. The company is extending its business into Vietnam and Singapore.  

 

Related reports:
Thailand International Motor Expo 2018: Nissan Leaf and other EV models (December 2018)
Overseas expansion of Chinese OEMs under the Belt and Road Initiative (October 2018)
Thai vehicle production expected to grow to 2 million units in 2018 (April 2018)
ASEAN: Vehicle sales recover, shifting from eco-car policies to EV incentives (January 2018)