KUALA LUMPUR – Thailand has lost its number two spot in Southeast Asia’s automotive market after Malaysia’s sales figures zoomed past the “Detroit of Asia” in the first quarter of 2024.
According to the Malaysian Automotive Association (MAA), auto sales increased 5% in the first quarter (Q1) of 2022 to 202,245 vehicles, followed by an 11% increase in 2023 to a record 799,731 vehicles.
Malaysia’s sales performance is credited to tax exemptions for domestically produced vehicles, which was part of the government’s economic stimulus package during the pandemic in 2020.
MAA was quoted as saying that fulfilment of tax-free bookings boosted sales figures in 2023, even though the exemptions ended in mid-2022.
However, a 7.5% decline in total vehicle sales is expected this year despite the increase in sales of hybrid and battery electric vehicles.
“Many new model launches including electric vehicles with very competitive prices helped to spur sales.
“Consumer spending may slow down due to concerns over targeted subsidy rationalisation, high cost of living, implementation of proposed High Value Goods Tax, and higher service tax rate for some services, including motor vehicles repair and maintenance,” the association said in a statement.
In comparison, Thailand, known for its robust auto industry, saw a slump in sales – a drop of 25% in Q1 2024, compared to the same period last year, reported Nikkei Asia.
Thailand’s declining monthly sales started in June 2023, which were blamed on the increase in non-performing auto loans and stagnant consumption.
Meanwhile, top ranked Indonesia saw sales drop 24% in Q1 last year when interest rates started to rise, resulting in a lack of consumer appetite.
Indonesia managed to sell slightly more than one million vehicles in 2023, falling short of the 1.05 million targeted by the Association of Indonesia Automotive Industries. The 2023 figure also decreased 4% from 2022 and saw 30,000 fewer vehicles sold than in 2019.
Vietnam also saw a dip in sales, declining 16% in Q1 2024 compared to the same quarter last year. The report pointed to a sluggish domestic economy and exports, among others.
Auto sales in the Philippines increased 13% in Q1 this year due to a 4% easing of inflation rates and strong consumer spending.
Automakers from China, Japan, South Korea and others are muscling into the region’s auto market, targeting the growing middle class and macroeconomic conditions in Southeast Asia. – May 15, 2024