Thailand is likely to cede its position as the top automotive market in ASEAN this year, primarily as a result of the massive flooding that occured a few months back. Though the numbers aren’t completely in, it is set to fall behind Indonesia in terms of overall numbers for 2011.
Up to September, the Kingdom was still in top spot, but sales volume dropped by half in October compared to the month before, and the slump continued in November. Reports estimate that the full-year sales volume is expected to fall short of the 800,000 or so units shipped in 2010.
Meanwhile, new-vehicle sales in the first 11 months of this year in Indonesia climbed by 17%, to 813,856 units, a figure that has already surpasssed the previous record of 760,000 from 2010. As it goes, the annual total is on pace to hit 870,000 units, the reports add.
And it looks set to cement that position – earlier this month, the country’s industry minister projected that both sales and production will exceed a million units by 2013. In anticipation of this, Japanese automakers – which already hold a combined market share of more than 90% in the market – are boosting production and their parts suppliers are ramping up investment.
Indonesia is hoping to become home to Japanese car factories by promoting the nation as an alternative to flood-ravaged Thailand, the country’s Trade Minister Gita Wirjawan said in a recent interview. The country has already contacted a multitude of Japanese firms, and “has told them that we are very much interested in receiving investment,” according to Gita.
It isn’t just the Japanese that are making their way in – General Motors has decided to invest US$150 million to construct a new plant, and BMW recently started local production of one of its luxury sedan models. The reports add that despite the effect of the European debt crisis, consumption is expected to remain robust in Indonesia next year, aided by interest rate cuts.
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AI-generated Summary ✨
Comments express frustration that Malaysia's automotive market has been hindered by government policies like protectionism and high taxes, which drove manufacturers to set up plants in Thailand and Indonesia instead. Many believe Indonesia and Thailand are rapidly growing automotive markets due to their larger populations, lower production costs, and friendlier policies, threatening Malaysia’s position in ASEAN. Several comments highlight that Malaysia’s small market size and protection policies prevent foreign investment and restrict industry growth, while others criticize corruption, weak enforcement, and lack of competitiveness. Some suggest Malaysia should shift focus from manufacturing to service industries. Overall, the sentiment is that government policies and protectionism have hampered Malaysia’s automotive competitiveness, with many lamenting that Indonesia and Thailand are surging ahead economically.