The automotive sector is the second largest steel consuming sector in many countries in ASEAN. Taking the lead is Thailand where the country has become the production hub for many global automotive manufacturers. Malaysia has its own national car producers while Indonesia’s vehicle production has been registering a continuous growth rate. Meanwhile, demand for vehicles in Vietnam looks healthy although the infrastructure in the country is not so well developed at the moment.
Thailand’s automotive sector remained resilient in 2011. Vehicle production declined in the early part of the year due to the economic slowdown in the country as well as the earthquake and tsunami in Japan. Major car makers were forced to cut back their production as a result of the shortage of auto parts from Japan.
Commercial car production from January to July contracted by 3%, when compared to the same period of 2010. Meanwhile, passenger car production seems to be healthier with an increase of 2% YoY. Thailand's government has recently launched a first time buyer car program and it is expected that this scheme will help to boost up domestic demand for vehicles in the country till the end of 2012.
As for Malaysia, according to the Malaysia Automotive Association, vehicle demand in the country remains strong. However, the number of car booking dropped during the third quarter due to the impact of the amendments to the Hire Purchase Act 1967 which requires more complicated procedures and more documents when purchasing a car.
According to the Department of Statistics, Malaysia’s production index for motor vehicle from January to July 2011 slowed down by an average of 15% when compared on a year on year basis. However, compared to the second half of 2010, the figure in the first seven months of 2011 showed a continuous increase. Proton and Perudua, the national car makers, are preparing to launch new models in the near future. This could help to boost up domestic demand in the country.
Indonesia’s automotive sector remains buoyant. The country’s motor vehicle production, as reported by CEIC, showed a significant continuous upward trend after a sharp decline in 2009. The country’s stable economic outlook as well as the introduction of new vehicle models would be major factors driving the sector in 2011.
According to the Frost & Sullivan Research Company, automobile sales in Indonesia are expected to reach 797,000 units in 2011, an increase of 4.3% from last year. Demand for passenger cars is expected to grow by 4.1% to 564,000 units, while commercial vehicles would climb 4.5% to 233,000 units in 2011. An increase in car ownership taxes to between 10 and 15 percent and the fuel price restriction may result in consumers downgrading to smaller engines and more fuel-efficient vehicles.
As for Vietnam, the automotive sector is becoming more important, especially in view of the growing demand for passenger cars. According to the Vietnam Automobile Manufacturers Association, vehicle sales grew significantly in 2010. However, demand from January to July of 2011 became sluggish, growing by only 1% YoY to 61,132 units. Nevertheless, the demand for passenger car rose by 24.9%, while sales volume for commercial vehicles declined by 12%. Vietnam’s restriction on vehicle import as well as the poorly developed infrastructure in the country may be the main reasons for the slowdown of the automotive sector in the country.
(Sourced from SEAISI)
