How ASEAN automotive markets rode the pandemic’s tides
AS MUCH AS the Philippine automotive industry faced the grave impact of the coronavirus disease 2019 (COVID-19) pandemic, with 40% total decline in sold units, car markets of our neighbors in Southeast Asia (SEA) also absorbed the pandemic’s impacts. Nevertheless, the region shares a positive outlook for the rebound of their automotive industries this year, driven by the active presence of industry players.
Citing exclusive data from local industry sources, United Kingdom-based automotive news and insight portal just-auto.com reported in February that vehicle sales of top ASEAN markets dropped to 28% last year. The second quarter of the year tallied a sharp decline of 66%, while the third quarter showed 24% decline. The year ended with 10% decline in sales during the fourth quarter (Q4), compared to units sold in the same period in 2019.
“Some markets in the region, such as Thailand, began to stabilize in the fourth quarter while sales in Malaysia and Vietnam began to rebound,” the report added.
Thailand stood as the largest vehicle market last year amid its vehicle sales declining by more than 21% to 792,146 units from 1,007,552 units in 2019. Vehicle production, meanwhile, fell by over 29% to 1.42 million units, and exports dropped by over 30% to 735,842 units.
The website’s report added that the Federation of Thai Industries expects domestic vehicle sales to decline further in 2021 by over 5% as economic growth remains “under pressure”, but the country’s largest automotive manufacturer, Toyota Motor, expects total vehicle sales to rise by between 7% and 14%
Indonesia follows Thailand with 532,027 units sold. With a 48% decline, however, the market was observed to be the “worstperforming” last year. Furthermore, the first nine months of 2020 recorded a 51% plunge in sales, followed by almost 42% to 159,981 units in Q4.
Recording just a 12% drop at 529,434 units, Malaysia was noted to have an expanded new vehicle in Q4 2020 by an increase of almost 17% compared to the same period in 2019.
“This followed a 14% yearon-year rise in the third quarter and wiped out most of the 50% decline seen in the first half of the year,” just-auto. com’s report also noted, adding that new models, especially from local manufacturer Proton, have helped attract buyers to market.
Falling by just over 7% to 283,983 units last year, Vietnam was regarded as the best-performing vehicle market in the region. The market was seen to solely have avoided falling into recession amid COVID-19, especially with its preemptive action at the onset of the pandemic and its “growing status” as an alternative production location to China.
ADAPTABILITY WITHIN SEA
Although declines mostly marked the Southeast Asian automotive landscape, car markers “have continued to push momentum” last year as they adapted to economic disruptions, as a media intelligence firm recently observed.
Isentia, in a recent whitepaper, observed that car launches highlighted the past year amid the economic slowdown.
Out of the firm’s study of digital journalism coverage and social media posting in key Southeast Asian countries, Isentia observed several car launches, such as BMW’s launch of the BMW M2 Edition by Futura 2000 in Indonesia; Honda’s lunches in Malaysia, Philippines, and Thailand; and Toyota’s new releases in Vietnam, Malaysia, and the Philippines.
Aside from launches, innovative approaches were also noted among carmakers in an effort to boost vehicle sales.
In Malaysia, MercedesBenz and dealer Hap Seng Star launched the first Autohaus car dealership, with luxury boutiques that provide customers and their cars with exclusive design series and accessories from the brand.
In Indonesia, in celebration of the same carmaker’s 50th anniversary featured two locally-assembled high-end sports utility vehicles from a factory in Bogor, West Java.
Locally, Moris Garrages (MG) Philippines partnered with Miss Universe Philippines winners in a competition for a chance to win a brand-new car from the brand.
In Vietnam, Mazda held a big promotion of all existing cars and special exiting cars in celebration of the brand’s centennial anniversary.
With these apparent signs of adaptability of the sector, automotive industries within the region gains high hopes.
Sharing her thoughts on the study’s results, Lady Ochel Espinosa, regional insights manager for emerging markets, SEA at Isentia, expects a ‘more exciting’ transition among carmakers this year as Indonesia, Philippines, and Thailand gains more attention in the industry.
“It may be said that the emerging markets in Southeast Asia are ey and pivotal to the automotive industry’s continued growth, as the global vehicle purchases continue to climb,” Ms. Espinosa was quoted as saying in the whitepaper.
In addition, a noteworthy trend noted by Isentia is the adoption of electric vehicles, which was observed in Singapore.
“We observe growing interest in electric cars as the government pushes various initiatives to encourage early adoption, Isentia’s Senior Insights Manager for Singapore Jenina Wang was quoted as saying, adding that active discussion among netizens on comparing EVs from Tesla, BYD, and BMW have surfaced.