Report: Malaysia Overtakes Thailand As ASEAN’s Second Largest Auto Market

According to a recent analysis published by Nikkei Asia, Malaysia has become Southeast Asia's second-largest auto market, surpassing Thailand for three consecutive quarters through January-March 2024. Indonesia still stands as the largest, adds said analysis.

In said report, Nikkei Asia compiled sales data by trade associations from Malaysia, Thailand and Indonesia, along with the Philippines and Vietnam.  Citing the Malaysian Automotive Association (MAA), the report highlights a 5% increase in auto sales in the first quarter from 202,245 vehicles to 799,731 vehicles in 2023.

Sales tax exemptions for domestically produced vehicles, part of the government's economic stimulus package, provided a tailwind for national carmakers Perodua and Proton, which held about 60% of the market share.

"Consumer spending may slow down due to concerns over targeted subsidy rationalization, high cost of living, implementation of proposed High Value Goods Tax, and higher service tax rate for some services including motor vehicles repair and maintenance," adds MAA.

However, sales in Thailand have been in a slump, with monthly auto sales declining year-on-year due to increasing non-performing auto loans and stagnant consumption. Indonesia, though the largest market still, also lacks momentum, with its auto sales falling 24% from a year earlier as interest rates rose, leading consumers to hold back on purchases.

Elsewhere in the region, auto sales in Vietnam fell 16% in the first quarter due to stagnant exports and other factors. Despite a rush of demand in December before the expiration of a reduction in registration fees for domestically produced cars, sales figures returned to year-on-year declines in January and February.

In the Philippines, figures increased 13% in the first quarter, the highest among the five countries, after inflation eased to around 4% in late 2023 and consumer spending remained strong.

As automakers from China, Japan, South Korea, and other countries increasingly compete in ASEAN nations with a growing middle class, subsidies and macroeconomic conditions are expected to be key factors for the region's auto sales. KR