Friday, August 17, 2012

Asean to become 6th biggest automotive market in the world

Asean is set to become the sixth biggest automotive market globally by 2018, with vehicle sales almost doubling to nearly 4.7 million units, compared with 2.4 million in 2011, according to Frost & Sullivan.

Frost & Sullivan Asia Pacific automotive practice research manager Vijayendra Rao said in a statement yesterday that the growth would be spearheaded by Thailand and Indonesia.

“The market is likely to grow at a compound annual growth rate (CAGR) of 10.1 per cent (2011-2018), mainly driven by growth in Thailand and Indonesia,” he said.

The two countries' vehicle sales were likely to hit one million units by 2013, driven by local demand, increased buying power and significant investments from Japanese original equipment manufacturers (OEMs), he added.

Rao said Thailand was expected to continue its dominance as a production hub in Asean due to the significant investments by Japanese OEMs, incentives from the government, good supply base and required talents.

He also said that production in Indonesia would cater to local demand, mainly driven by the shift of ownership to cars, multi-purpose vehicles and sports utility vehicles from motorcycles.

“Indian and Chinese automotive companies are also looking at expanding to Asean,” Rao said, adding that Asean was a competitive automotive production base and a net vehicle exporter with strong competency in certain product ranges.

He noted also that passenger vehicle sales in Asean were likely to increase at a CAGR of 10.2 per cent to 3.1 million units in 2018 from 1.5 million units in 2011.

“Commercial vehicles sales are expected to grow at a slightly slower pace at a CAGR of 9.8 per cent to reach 1.6 million units in 2018 from 780,000 units in 2011.”

On the prospects in Malaysia, Rao noted that the Government had extended the full tax exemption of import duty and excise duty on hybrid and electric cars for vehicles below 2,000cc until Dec 31, 2013.

“This has led to huge growth in sales for hybrid models such as the Honda Insight, Toyota Prius and Lexus CT 200h.”

However, he added that automakers needed to do more to educate the public about the technology and address consumers' concerns on the maintenance cost of the vehicles and introduce more attractive models to attract consumers' interests.-Asia News Network (August 16, 2012)

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