ASEAN KEY DESTINATIONS
Asean to become 6th biggest auto market in world
None of the Asean countries has featured in the top ten global markets, but as a region, it has assumed greater importance in the past few years due to the implementation of the Asean Free Trade Agreement in 2010 and healthy rivalry among the grouping's member countries in attracting foreign investments, Vijayendra Rao, research manager of Asia-Pacific Automotive Practice at Frost & Sullivan, said in a press release yesterday.
New analysis from Frost & Sullivan found that 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 .
Rao said that in Thailand and Indonesia, vehicle sales are likely to hit 1 million by 2013, driven by local demand, increased buying power and significant investments from Japanese original equipment manufacturers (OEMs).
He said Indian and Chinese automotive companies are also looking at expanding into Asean markets. He added that Asean is a competitive automotive production base and a net vehicle exporter with strong competency in certain product ranges.
"Thailand is expected to continue its dominance as a production hub in Asean due to the significant investments by Japanese OEMs, incentives from the government, a good supply base and required talents," he pointed out.
He said that production in Indonesia will cater to local demand, mainly driven by the shift in ownership from motorcycles to cars, multi-purpose vehicles and sport utility vehicles.
Rao said that passenger vehicle sales in Asean are likely to increase at a CAGR of 10.2 per cent to 3.1 million in 2018 from 1.5 million in 2011.
Commercial vehicle sales are expected to grow at a slightly slower CAGR pace of 9.8 per cent to reach 1.6 million in 2018 from 780,000 in 2011.
He said pick-up trucks continue to be the most popular vehicle in Thailand despite the slower-than-expected growth in 2011, but consumers are now beginning to favour passenger vehicles over the traditionally popular pick-up trucks.
"The younger generation of Thais prefers smaller cars and eco-cars, which are both stylish and affordable. Most of these cars are hatchbacks and are perceived as sporty and fast," Rao noted.
In 2011, the passenger vehicle segment witnessed a 3.9-per-cent increase year-on-year with 650-1,500cc vehicles being the most popular, while sales of pickup trucks declined 4.9 per cent year-on-year.
"Toyota Motor Thailand, Honda Automobile Thailand and Nissan Motor Thailand are expected to continue to be key market leaders in the passenger vehicle market in Thailand in 2018," Rao predicted.
He added that vehicle production in Thailand is expected to grow at a CAGR of 11.9 per cent from 2011 to 2018 while vehicle sales will likely increase at a CAGR of 16.1 per cent. "Production of passenger vehicles is likely to outpace commercial vehicles," he added.
Rao said that Asia, the Middle East and Oceania are the key export destinations for the Thai automobile industry. A total of 73.9 per cent of vehicles exported from Thailand in 2011 were to countries in these regions, he added.
He also said that Thai consumers are becoming sophisticated, showing an increasing preference for automatic transmission vehicles with safety features such as an anti-lock brake system (ABS), airbags and comfort enhancing features such as a global positioning system (GPS) and entertainment systems that feature DVD players and TV.
Rao said that foreign auto-makers based in Thailand are planning to launch about 40 all-new models and variants in the short-to-medium term, which is likely to include 10 hatchbacks and sedans under the eco-cars scheme. "These launches are expected to stimulate the sales volume in the Thai automotive market," he added.
Vehicle sales in Thailand are expected to grow at a CAGR of 16.1 per cent (2011-2018) to reach 2.26 million in 2018, driven by positive consumer sentiment and the availability of new variants and models.
He added that government schemes such as the First Car Buyer Programme and tax incentives for eco-cars are expected to stimulate domestic demand during the period of 2011-2018.
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