ASEAN: Thailand and Indonesia building EV and battery production facilities
VinFast releases its first EV in Vietnam, Hyundai sets up R&D and production sites in Singapore
Recently in the ASEAN market, every country has been actively accelerating electrification. Thailand and Indonesia aim to be regional EV (electric vehicle) production hubs as well as build manufacturing facilities for EV batteries. The Thai government has set a target for electrified vehicles to reach 30% of total domestic vehicle production by 2030 as part of its 3030 EV Production Policy. The Indonesian government intends to integrate the EV battery industry from mining to lithium-ion battery production using its abundant nickel ore. Malaysia plans to announce its new EV policy in July 2021. VinFast, a Vietnamese automaker, launched its first EV in the country. In Singapore, Hyundai Motor is building an innovation center with EV production facility.
In 2020, four major ASEAN countries produced 2.65 million vehicles, down by 33.1% year-over-year (y/y). As demand in and outside the ASEAN region remains sluggish due to the COVID-19 pandemic, vehicle production fell by 30%. Production for the period January-April 2021 increased by 17.8% y/y to 1.13 million vehicles. However, vehicle production has not returned to the pre-COVID-19 level yet due to resurgence of COVID-19 in some regions as well as a lack of semiconductors. Regarding activities related to vehicle production, Great Wall Motor has started operations in June 2021 at the renovated plant in Thailand, which it had acquired from GM. In Indonesia, Hyundai Motor is building a second plant. In the Philippines, the government will extend the period by three years in which automakers should achieve requirements to receive incentives in the automotive industry development program, considering the impact of the COVID-19 pandemic. In Vietnam, Hyundai Motor and Hong Duc Automobile are constructing new plants.
New vehicle sales in ASEAN’s six major countries for 2020 decreased by 28.6% y/y to 2.41 million units due to restrictions on economic activities to prevent the spread of COVID-19. Sales for the period January-April 2021 increased by 18.7% y/y to 970,000 units, indicating a recovery from a significant fall in the previous year. Compared to sales for the period January-April 2019, however, a decrease of 15.7% was recorded, showing sales did not return to the pre-COVID-19 level. Regarding activities to promote vehicle sales, relaxation of the sales tax on luxury goods for vehicles has started in March 2021 in Indonesia. In Malaysia, the sales tax exemption period for passenger cars was extended to December 31, 2021. In Vietnam, vehicle registration fees for locally produced vehicles were reduced by 50% from June to December 2020 as a government support measure for the automotive industry. At the same time in the Philippines, the government imposed provisional safeguard duties on vehicle imports in January 2021. This measure would lead to price hikes for imported vehicles and limit a recovery of the automotive industry.
In the ASEAN market, competition has intensified in the mobility services sector, including ride-hailing services, which is rapidly expanding. Southeast Asia’s ride-hailing giant Gojek and e-commerce leader Tokopedia will merge to compete with rivals emerging in the region. In Singapore, Car Club, a leading car-sharing service provider, is experiencing growing demand for its services in the midst of the COVID-19 pandemic.
|Great Wall Motor’s Haval H6 Hybrid SUV (to be launched in Thailand in Q2 2021)
(Exhibited at Bangkok International Motor Show)
|Vietnamese automaker VinFast’s first EV VF e34
ASEAN Vehicle Sales and Production Update (Q1 2021) (May 2021)
Bangkok International Motor Show 2021 (Part 2): Pickup trucks competition (Apr. 2021)
Bangkok International Motor Show 2021 (Part 1): GWM unveils its lineup of electric vehicles (Apr. 2021)
Thailand: Resuming plan to be an EV hub in ASEAN region after COVID-19 pandemic (Oct. 2020)
Indonesia: Favoring EVs more than LCGC under revised luxury tax scheme (Aug. 2020)
ASEAN: Thailand and Indonesia aim to be regional EV hubs, CASE businesses growing (May 2020)