Thailand leading the way to make Asean No 6 auto market

"Thailand is expected to continue its dominance as a production hub in Asean because of the significant investments by Japanese OEMs [original equipment manufacturers], incentives from the government, good supply base and required talent," Vijayendra Rao, automotive research manager for Asia-Pacific, said yesterday.

The region’s sales are expected almost to double to nearly 4.7 million vehicles from 2.4 million last year over the 2011-18 period, he said.

Individually, none of the Asean countries has featured in the top 10 markets globally, but the region has assumed greater importance in the past few years because of the implementation of the Asean Free Trade Agreement in 2010 and healthy rivalry among Asean countries to attract foreign investment.

New analysis from the "CEO 360 Degree Perspective of the Automotive Industry in Asean", covering Indonesia, Malaysia, Thailand and Vietnam, shows that the market is likely to grow at a compound annual growth rate (CAGR) of 10.1 per cent over the period, mainly propelled by Thailand and Indonesia.

Sales in those two countries are likely to hit 1 million vehicles by next year on local demand, increased buying power and significant investment from Japanese OEMs. Indian and Chinese auto-makers are also looking at expanding to Asean., which is a competitive production base and a net exporter with strong competency in certain product ranges.

Production in Indonesia will cater to local demand, mainly driven by the shift of ownership to cars, minivans and sport-utility vehicles from motorcycles.

Passenger cars

Passenger-vehicle sales in Asean are likely to increase at a CAGR of 10.2 per cent to 3.1 million units from 1.5 million units, while commercial-vehicles sales are expected to grow at a slightly slower pace of 9.8 per cent to 1.6 million units from 780,000 units, Rao said.

Pickup trucks continue to be the most popular in Thailand despite slower-than-expected growth last year. Younger Thais prefers smaller cars and eco-cars, which are both stylish and affordable."Most of these cars are hatchbacks and are perceived as sporty and fast," he said.

Last year, the passenger-vehicle segment witnessed a 3.9-per-cent increase, with 650cc-1,500cc vehicles the most popular, while sales of pickups declined 4.9 per cent.

Vehicle production in Thailand is expected to grow at a CAGR of 11.9 per cent while total vehicle sales will likely increase at a CAGR of 16.1 per cent.

"Production of passenger vehicles is likely to outpace commercial vehicles," Rao said.

Asia, the Middle East and Oceania are the key export destinations for Thailand, absorbing 73.9 per cent of the vehicles shipped abroad last year, he added.