ASEAN Automotive Outlook, 2021

In 2020, due to the COVID-19 pandemic, the Association of South East Asian Nations (ASEAN) automotive market experienced a significant sales decline of 28.5%, from a total sales of 3.5 million units in 2019 to 2.5 million units in 2020. Passenger Vehicles (PVs) constituted 63.9% of the market and Commercial Vehicles (CV) accounted for 36.1%. Of these, Thailand, Indonesia, and Malaysia contributed a joint market share of 74.9%. Thailand surpassed Indonesia, and led the market in 2020. Especially in 2020, the outbreak of the COVID-19 pandemic influenced the automotive market’s activities due to implementation of social distancing, reduction of retail operations, and production closures. The impact is expected to be significant in terms of a weaker Gross Domestic Product (GDP), lower utilization of vehicles, and lesser automotive purchase attractiveness in the short term. Increase in government spending (including fiscal injections, infrastructure development, individual financial aid, and tax exemption) in Thailand, Indonesia, and Malaysia in 2021 is likely to accelerate the economic activity in these countries. In addition, the progress of vaccination is one of the critical factors that have a significant relationship with GDP recovery and outbreak control. However, political uncertainties, such as the suspension of the Malaysian Parliament and the extension of the state of emergency in Thailand are affecting the country’s development. Japanese automotive brands lead the ASEAN market. Toyota, Honda, Mitsubishi, Nissan, and Isuzu are the key contributors in Thailand, Indonesia, and Malaysia. In particular, Isuzu D-Max and Toyota Hilux are the key contributors in the Commercial Vehicle (CV) segment in Thailand and Malaysia. In Malaysia, Proton grew significantly in 2020, an increase of 4.4% Year-over-year (YoY). The trend of Low-cost Green Car (LCGC) and Electric Vehicle (EV) development will penetrate further in ASEAN. For example, Thailand aims to become an EV hub by 2025. Thailand’s National EV Roadmap targets for xEV production to reach 30% of total production in 2030. Similarly, the Indonesian Government promotes LCGCs and offers income tax incentives (up to 20 years of full corporate tax exemption) are likely to bring production attractiveness to the automotive market. This study assesses the automotive market in key ASEAN countries, with focus on Thailand, Indonesia, and Malaysia. It provides the automotive market snapshot in these 3 ASEAN countries. Each country snapshot covers the Total Industry Volume (TIV), in the historical period (2016–2020) and the forecast period (2021–2025). This research includes segmentation breakdown in 2020, such as vehicle segment, key Original Equipment Manufacturers (OEMs) and market share. In addition, it highlights 5 key trends and overall impact levels that will influence the automotive market in Thailand, Indonesia, and Malaysia in 2021, respectively. Author: Ming Lih Chan