The Association of Southeast Asian Nations (ASEAN) region will be the sixth biggest automotive market globally by 2018, with Thailand and Indonesia leading the growth in vehicle sales, predicts research firm Frost & Sullivan.
Individually, none of the ASEAN countries has featured in the top 10 markets globally, but as a region, it has assumed greater importance in the last few years due to the implementation of ASEAN Free Trade Agreement in 2010 and healthy rivalry among ASEAN member-countries to attract foreign investments, said Vijayendra Rao, research manager of Asia Pacific Automotive Practice division at Frost & Sullivan.
New analysis from the company’s “CEO 360 Degree Perspective of the Automotive Industry in ASEAN” forecasts that the market will grow at a compound annual growth rate (CAGR) of 10.1 percent from 2011 to 2018.
The analysis covers four key automotive markets in ASEAN—Indonesia, Malaysia, Thailand and Vietnam—and predicts that sales from the region will likely almost double to nearly 4.7 million units from 2.4 million in 2011.
Rao said that Thailand and Indonesia vehicle sales are likely to hit 1 million units by 2013, driven by local demand, increased buying power and significant investments from Japanese OEMs (original equipment manufacturers).
He added that Indian and Chinese automotive companies are also looking at expanding to ASEAN, a competitive automotive production base and a net vehicle exporter with strong competency in certain product ranges.
“Thailand is expected to continue its dominance as a production hub in ASEAN due to the significant investments by Japanese OEMs, incentives from the Government, good supply base and required talents,” he said.
He also said that production in Indonesia will cater to local demand, mainly driven by the shift of ownership to cars, multipurpose vehicles and sports utility vehicles from motorcycles.
Rao said that passenger vehicle sales in ASEAN are likely to increase at a CAGR of 10.2 percent to 3.1 million units in 2018 from 1.5 million units in 2011. Commercial vehicles sales are expected to grow at a slightly slower pace at a CAGR of 9.8 percent to reach 1.6 million units in 2018 from 780,000 units in 2011.
“CEO 360 Degree Perspective of the Automotive Industry in ASEAN” is part of the Automotive & Transportation Growth Partnership Services program, which also includes research in the following markets: “Executive Analysis of the Carsharing Market in APAC,” “CEO’s 360 Degree Analysis of Fuel Cell Electric Vehicle Market in Japan and South Korea,” and “Strategic Analysis of the Microcars Market in Japan,” among others.
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