Thailand, Indonesia & Malaysia Battle For The Throne
With Thailand tottering on the throne, will Indonesia or Malaysia usurp its place? Guest writer, EUGYNE, reports.
Thailand has led the South East Asian automotive industry for many years now, but will they be able to maintain the coveted position henceforth? The floods in 2010 and the frequent protests in recent months have forced foreign carmakers to decamp and seek alternative ‘pastures’.
The total car sales for the Kingdom was 1 330,678 units in 2013 and 1,436,335 units in 2012 – a drop different of 105,657 units. Carmakers have not totally shut down production lines in Thailand, but have been rather smart about it; they have split their resources between different countries, primarily Indonesia and Malaysia, rather than keep all eggs in one basket
Most of the foreign marques have already set up manufacturing plants in Indonesia, and more will be coming very soon. The Indonesia International Motor Show (IIMS) in recent years has been well-received by enthusiastic crowds. The country is hoping to follow in Thailand’s footsteps, which success was built on burgeoning domestic demand that led to the country becoming a heavyweight global exporter of vehicles and automotive components.
As a result of incentives and taxes offered by the Indonesian government, the country’s roads are dominated by multi-purpose vehicles. Total car sales for 2013 were 1,229,536 units, an increase of 113,306 units from the year prior. Indonesia is catching up with Thailand, and the difference between the two countries’ car sales had shrunk significantly; in 2012, Thailand sold about 320,000 cars more than Indonesia but in 2013, it only surpassed sales of its SEA comrade by about 100,000 units.
Malaysia’s car sales lag behinds at only half the numbers that Thailand and Indonesia achieved. Total car sales for 2013 were 655,793 units, an increase of 28,040 units from the year before. Considering that car sales were affected by the General Election in May and the failure of the ‘MySikap’ system which affected car trade, it is a decent achievement.
Malaysia still has an advantage to grow very fast. Recently, Malaysia announced their new National Automotive Policy. A price reduction between 20% to 30% for locally assembled cars (CKD) is expected. Between Complete Built Up (CBU, 30%) and Complete Knock Down (CKD, 0~10%) vehicles, carmakers are able to save between 20% and 30% on import tax. The Malaysia government is providing incentives to encourage foreign carmakers to set up manufacturing plants in the country as well.
So, which country will wear the crown in the near future? Stay tuned.
Read our report on the auto industry in the Philippines here.