Sales of new vehicles in southeast Asia’s six largest markets combined are estimated to have declined by over 19% to 700,528 units in the first quarter of 2020, according to GlobalData, a leading data and analytics company.
“The ASEAN vehicle market largely shrugged off the threat of COVID-19 in the first two months of the year. However, the crisis severely dented vehicle demand in the region from March,” says David Leggett, Automotive Analyst at GlobalData.
“Several markets of the region turned down sharply in the first quarter as lockdowns shuttered dealerships and manufacturing plants across southeast Asia. Thailand saw first quarter sales down 24% as its economy reeled under the impact of much-reduced travel and tourism. Malaysia Q1 vehicle sales were down by 26% and Vietnam saw a slump of almost 32%.”
The worst of the crisis is expected to be in the second quarter of 2020, before economic lockdowns begin to be eased this month and in June.
Leggett continues: “Although 2020 is seeing a setback for the automotive sector in ASEAN markets, long-term prospects for the region remain very strong. GlobalData’s analysis points to strong indicators for long-term demand as motorisation rates rise with high economic growth – especially in Indonesia with its increasingly transportation hungry population of 273 million. Its market of around 1 million new vehicles a year is forecast to double to 2 million vehicles a year by the end of this decade.
“In addition to strong long-term market prospects, the automotive manufacturing industry in the region benefits from relatively low costs, favourable government policies for investment, as well as free trading regimes for vehicles and components.”