KUALA LUMPUR: Malaysia has surpassed Thailand to become South-East Asia’s second-largest auto market, trailing only Indonesia. This marks a significant shift in a region that has become a crucial battleground for Asian automakers.
Nikkei Asia analysed sales data from industry groups in Malaysia, Thailand, Indonesia, the Philippines, and Vietnam, revealing that Malaysia’s auto sales, which had long been third, outpaced Thailand’s for three consecutive quarters through January to March 2024.
The Malaysian Automotive Association reported a 5% increase in auto sales in the first quarter compared to the previous year, reaching 202,245 vehicles. This followed an 11% increase in 2023, setting a record of 799,731 vehicles sold.
Government sales tax exemptions for domestically produced vehicles, part of an economic stimulus package, bolstered national car brands Perodua and Proton, which together captured about 60% of the market share. Although these tax exemptions ceased in mid-2022, the fulfillment of tax-free bookings continued to boost 2023 sales.
“Many new model launches, including competitively priced electric vehicles, helped spur sales,” the association stated.
Ivan Khoo, a Toyota sales agent, told Nikkei Asia that sales in the first two months of 2024 exceeded expectations, with the Vios being the most popular model, priced below RM100,000. “Both segments, Toyota’s ICE (internal combustion engine) and hybrid cars, will continue to do well,” Khoo added.
In contrast, Thailand’s auto sales have slumped. Known as the “Detroit of Asia” for its automotive industry concentration, Thailand fell to third place after a 25% year-on-year drop in first-quarter sales. Monthly auto sales have been declining since last June due to rising non-performing auto loans and stagnant consumption. The share of EVs is increasing, driven by the entry of Chinese manufacturers.
Indonesia is also struggling, with first-quarter auto sales down 24% year-on-year due to rising interest rates, leading consumers to delay purchases. Sales in 2023 were just over one million vehicles, down 4% from 2022 and 30,000 fewer than in 2019, falling short of the Association of Indonesia Automotive Industries’ target of 1.05 million.
Vietnam’s auto sales fell 16% in the first quarter, with the domestic economy stagnant due to sluggish exports and other factors. Despite a surge in demand in December before the expiration of a reduction in registration fees for domestically produced cars, sales figures declined year-on-year in January and February.
