22/02/21
Lead
Although the sparrow is small and complete, who can seize the opportunity of the growth of the car market in the six ASEAN countries, Japanese, American or independent brands?
Author 丨 Li Sijia
Responsible editor 丨 Li Sijia
Edit 丨 Chic
As February draws to a close, most of the sales performance of the first month of the new year in major auto markets has been released.
However, when people focus on the domestic market, the European market, the US market, the South American market, the Middle East market and other major auto market sectors, it is easy to ignore a small but distinctive auto market - the Southeast Asian market.
Especially as the domestic, U.S. and European markets become saturated, and the search for new market issues lingers on every car company, the Southeast Asian market has become one of the emerging markets they are next trying to develop. But this regional market, which was previously almost monopolized by the Japanese system, once reached more than 80% of the market, and not anyone who wants to step into it can really survive.
It is precisely for this reason that when the car market represented by the six ASEAN countries changes, especially the growth changes, it attracts the attention of those brands that want to seek overseas breakthroughs.
According to foreign media reports, thanks to the sharp increase in sales in Indonesia and the relaxation of the lockdown restrictions in the second half of last year, the total sales of new cars in the six major ASEAN economies last year ushered in the first growth in three years. In fact, as early as last December, the total sales of new cars in the six ASEAN countries reached 330,000 units, an increase of 6% year-on-year and a 15% increase from the previous month, which has already shown signs of recovery in the regional auto market.
Overall, total new vehicle sales in Indonesia, Thailand, Malaysia, Vietnam, the Philippines and Singapore reached 2.79 million units, up 14% year-on-year, with Indonesia up 67% in sales. However, many market watchers predict that car sales in 2022 are unlikely to continue to rebound strongly as the Opmi-Kerong variant becomes popular.
In mid-2021, Indonesia overtook Thailand for the first time in two years to become the largest car market among the six ASEAN countries, with sales of 887,202 units. Of course, this is inseparable from the tax cuts introduced by the country in March last year to raise demand.
Indonesia's tax cuts were scheduled to expire at the end of last year, but the government has extended some of them until the end of March this year. This decision comes after the Indonesian Association of Automotive Manufacturers forecasts new car sales of 900,000 units in 2022. Although it is not as good as the 1.03 million vehicles before the pandemic (2019), it can also be regarded as a recovery.
In the Thai market, new car sales fell for three consecutive years to 759,119 units, a decline of 4%. Sales in Thailand rose year-on-year in the first half of last year, but new car sales lost momentum after lockdowns in Bangkok and other cities in July.
In addition, the shortage of chips and other components is also a factor that led to the decline in sales in Thailand.
Toyota, the top player in the Thai market, expects to sell 860,000 vehicles in Thailand in 2022. While Thailand's auto industry is "gradually normalizing," sales in this market are unlikely to return to 2019 levels of 1 million units until 2023 as consumer purchasing power has weakened during the long-term pandemic.
New vehicle sales in Malaysia declined for the second consecutive year and decreased 4% y/y to 508,911 units. After the Malaysian government imposed a nationwide lockdown in June last year, sales stopped almost completely for a while. According to the Malaysian Automobile Association, new car sales in Malaysia are expected to be 600,000 units in 2022, almost the same as in 2019.
This year, the sales volume of the Malaysian car market will benefit from the economic recovery of the country and its neighbors, as well as the extension of preferential tax policies for car sales. But new car sales in Malaysia will be lower than in 2019 this year, with the agency saying the local auto industry will continue to be affected by semiconductor shortages in 2022.
In the Vietnamese and Philippine markets, new car sales in 2021 both saw their first increase in two years, up 3% and 16% respectively to 300,000 units and 280,000 units. Vietnam is the fourth largest new car market in Southeast Asia in both 2020 and 2021, a position that has long been maintained by the Philippines.
For the Southeast Asian market, the performance of the car market in the six ASEAN countries is a barometer of the entire Southeast Asian market, after all, Myanmar cannot be expected to have a market with less than 10,000 vehicles per month to determine the wind direction of the Southeast Asian market. At present, the performance of the car market in the six ASEAN countries is not only affected by the epidemic and chips, but also closely related to the policies introduced by the government to attract foreign investment and the development of the automobile industry.
But the sparrow is small and well-equipped.
Therefore, whoever can ride on the east wind of the policy and successfully compete for the increase of this market in the context of the relaxation of the epidemic prevention policy and the slowdown of the chip shortage will add another territory to the competition for the global market. So who will it be, Japanese, American or independent brand?
Li Sijia
Leader of the anti-parsley alliance and long-time occupier of the first floor of the commune