CARMAKERS RACING TO RIDE ON S-E ASIA BOOM
MANILA: To get a taste of Southeast Asia’s burgeoning 600 million-strong consumer base and what it means for economic growth, take a look at the car industry.
Carmakers are racing to steal a bigger slice of the market attracted by rising incomes and young workers looking to buy their first set of wheels.
The Philippines and Vietnam will be the two fastest-growing production hubs from this year to 2021, according to BMI Research.
Output will surge 300 per cent in the Philippines to 359,000 units and almost double in Vietnam to 112,000 units, it forecast last month.
Toyota Motor Corp and PSA Group are among those swooping in to take advantage of both nations’ increasingly richer populations — many of whom are first-time buyers given existing car ownership is low.
Only six per cent of households in the Philippines own a car and two per cent in Vietnam, according to Pew Research Centre using 2014 data. The ratio is 82 per cent in Malaysia and 51 per cent in Thailand.
Car purchases will rise an average 15 per cent a year in the Philippines and Vietnam over the next five years, BMI predicts.
The Philippines has offered more than US$500 million (RM2.15 billion) of incentives for manufacturers who commit to produce at least 200,000 units of a model over six years, and Mitsubishi Motors Corp and Toyota have signed up.
Meanwhile, French manufacturer PSA, which owns brands such as Citroën and Peugeot, and Hyundai Motor Co are boosting production in Vietnam with a goal of selling to the region.
Chinese billionaire Li Shufu is buying a stake in Malaysia’s national carmaker Proton Holdings Bhd.
But all the new investment won’t be enough to dethrone Thailand and Indonesia as kings of the automotive industry in Southeast Asia.
The two each boast of annual outputs of more than a million units, with manufacturers lured by strong supply and logistics chains and better transport infrastructure. Bloomberg