ASEAN Light Vehicle Sales Update
November 2019

Two Months of Buyer Hold-off Expected in Thailand and Indonesia

ASEAN Light Vehicle (LV) sales fell by 3% year-on-year (YoY) in October, following an uptick of 4% YoY in the preceding month. The weak October performance resulted from double-digit declines in Thailand and Indonesia, the two largest ASEAN5 markets. The October outturn means that the region’s overall LV sales were down slightly (-1% YoY) for the first ten months of 2019.

In Thailand, the downtrend continued in October (-11% YoY), marking the second consecutive month of double-digit decline. The year-to-date (YTD) volume, however, was still in positive territory, but only just (+0.9% YoY). The drop in October is likely to have resulted from buyers taking a wait-and-see approach ahead of a) the late-November launch of new eco-car models, namely the upgraded Toyota Yaris and Yaris ATIV, the all-new Honda City and the all-new Nissan Almera; and b) aggressive year-end sales campaigns at the Thailand International Motor Expo 2019.

We expect to see a further decline in November, followed by a rebound in December. Looking ahead, however, we continue to forecast a total of 1.02 mn units sold both this year and next, unchanged from the 2018 result.

Turning to Indonesia, LV sales fell by 10% YoY in October, with declines in both the Light Commercial Vehicle (LCV) and Passenger Vehicle (PV) segments of 3% YoY and 12% YoY, respectively. The drop in LCV demand was mainly due to the slowing economy, while the double-digit contraction in PV sales is likely to have come from purchases being delayed until December to take advantage of the cut in the obligatory down payment for auto loans from 25% to 15%, starting on 2 December 2019. As with the Thai market, we expect a further decline in Indonesian sales in November, followed by an upturn in the final month of the year.

For the full-year 2019, we forecast a decline of 11% YoY to 932k units. The market was disrupted by political uncertainty and violent protests in H1 2019 (-12% YoY), but these issues have now been resolved. A more settled political landscape, together with several positive factors influencing LV demand, should boost the overall market next year.

We forecast an increase of 3% YoY in 2020, on total sales of 964k units, followed by even stronger growth of 8% YoY in 2021, to 1.04 mn units. (For further details, please refer to last month’s Perspective).

In stark contrast, the Malaysian LV market posted robust growth of 15% YoY and 21% month-on-month (MoM) in October. These impressive performances resulted largely from new model launches by the country’s two national brands, namely Proton’s facelifted Saga and new X70, along with Perodua’s upgraded Axia and new Aruz. The strong October result lifted the YTD volume from -2% to -0.4%. To account for the higher-than-expected sales in October, we have raised our near-term forecast slightly. We now expect the market to expand from 587k units sold last year to 608k units this year, rising to 613k units next year.

LV demand in Vietnam continued to climb in October (+6.5% YoY), supported by growth in the PV segment (+8.3% YoY). LCV sales, on the other hand, fell by 1.2% YoY. Looking at the January-October period, the overall LV market surged by 24.0% compared to the same period in 2018, driven by healthy PV demand, most notably in the import sector. The stronger-than-anticipated October result led to a slight increase in our full-year projection. Vietnam is set to close 2019 as the fastest-growing market in Asia, expanding by 21% to a record high of 390k units. The 2020 forecast remains cautious, however, with growth projected at just 3%, on total sales of 402k units, as demand is likely to suffer from the prevailing global uncertainty.

LV sales in the Philippines rose by a nominal 1% YoY in October, but by a stronger 6% MoM, with the market recording its highest volume in the last 22 months. This upturn put the YTD volume in positive territory (+2% YoY). As a reminder, LV demand was pulled ahead significantly to 2017, prior to a major tax hike in January 2018. Sales tumbled in the aftermath of the tax increase, and the market has been slow to recover.

For 2019 as a whole, we forecast growth of 2% to 396k units, followed by another increase of 2% in 2020, to a total of 404k units.


For further information contact Ms. Sukanya Tunhau
Phone +662 264 2050


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