Indonesia

Countries around the world are bracing for a possible, looming “second wave” of infections. However, the damage to the automotive industry has already been done. 

As one of the hardest hit sectors, the world’s light vehicle market is forecasted to decline by 17 percent to 73 million units in 2020, due to its impact and its associated economic fallout, according to GlobalData. This is a bigger one-off shock than witnessed in the two years of the global financial crisis. In fact, the damage has been the most acute in the second quarter of this year, when strict lockdown measures were in place across the world.

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In Indonesia, car sales fell by 46 percent annually in the first half to just 260,933 units, according to Association of Indonesian Automotive Manufacturers (Gaikindo) data compiled by Astra, as reported by The Jakarta Post.

Sales for the first half of the year in Thailand were down by 37.3 percent to 328,604 units, according to MarkLines Data Center. In particular, vehicle sales in June declined by 32.6 percent year-on-year to 58,013 units, marking its 13th month of successive declines. Production during the first half of the year was down by 43.1 percent to 606,132 units, according to the Federation of Thai Industries (FTI). 

Here, we continue to bring you the latest coverage in ASEAN’s automotive industry amid COVID-19: 

THAILAND

• Energy Absolute (EA) will be unable to deliver 5,000 electric vehicles (EV) to clients this year, causing it to revise its revenue outlook from THB20 billion set before the outbreak to THB15 billion, according to a report from Bangkok Post.
• By brand sales in June (data by MarkLines Data Center):
  • Isuzu was up by 26.1 percent to 16,661 units. For January to June, Isuzu reports sales of 76,054 units, down by 15 percent YoY. 
  • Toyota was down by 53.8 percent to 13,345 units
  • Honda was down by 52.1 percent to 5,822 units.
  • Mitsubishi sales were down 45.7 percent to 4,002 units
  • Nissan sales were down by 35.5 percent to 3,523 units.
  • The FTI announced that new vehicle production in June was 71,704 units, down by 58.5 percent YoY, but around 28 percent higher than the previous month as most car makers have restarted operations at their manufacturing plants. For 2020, FTI expects total vehicle production to reach 1.4 million units in 2020.
  • Sales of eco-cars in Thailand witnessed over 40 percent drop in the first half of 2020 to 69,816 units, MarkLines citing an article from Prachachat Turakij.
  • Starting August, Mazda Motor Corp. will return operations to normal or to pre-production adjustment levels. Overtime hours and work on holidays will resume for all plants. The car maker plans to continue normal operations from September onwards.
  • According to Bangkok Post, Germany-based MAN Truck and Bus Thailand remains optimistic about its future business in Thailand. Despite the ongoing pandemic, MAN maintains plans to expand its market in Thailand as it still sees the country—located geographically in the center of ASEAN—as a market with potential for its business expansion.
  • Suzuki Motor Thailand has sold 11,089 automobile units in the first half of 2020, down by 9 percent YoY.
  • The Thailand Energy Business Department said the enforcement of Euro 5 emissions standards will be postponed from 2024 after lockdown measures halted upgrade plans at six refineries. The upgrade requires technical help from overseas experts who are unable to visit Thailand because of travel restrictions imposed during the pandemic. According to Bangkok Post, the government is considering delaying a plan to make E20 the fundamental petrol at all stations because of the crisis.
  • China-based tire maker Linglong International Tire (LLIT) aims to boost its production capacity in Thailand in 2020, according to MarkLines, citing a Prachachat Turakij report.
  • Vroom Thailand, importer and distributor of Indian and European motorcycle brands, plans to expand its business by setting up a local factory to produce them in the country by 2023, according to Bangkok Post. The company plans to make Thailand its HQ in the ASEAN region.
  • During the first five months of 2020, only 600,000 motorcycles were sold in Thailand, down by 18 percent from 740,000 year-on-year, Bangkok Post cited Vroom chief executive Hideki Yanagisawa as saying. However, he expects better market sentiment in the second half this year, with full-year sales at 1.4 to 1.5 million units.
  • Thailand’s natural rubber industry is likely to remain depressed this year despite a sharp rise in demand for protective rubber gloves driven by the COVID-19 pandemic. According to the Thai Rubber Association, the virus crisis has prompted many automotive factories, notably in the United States and Europe, to shut down or slow their production, resulting in lower rubber tyre demand, Bangkok Post reported.
  • Eastern Polymer Group (EPG), Thailand’s top plastic moulder by capacity, is considering a move into the lucrative healthcare plastics market after suffering sales drops in its automotive products and insulation materials in air conditioners because of the pandemic, according to Bangkok Post.

INDONESIA

• PT Astra International has reported a drop in revenue and net profit in the first half of the year, largely because of the pandemic’s major impacts on the automotive industry and commodity prices, according to The Jakarta Post. Countermeasures against the pandemic implemented in most regions in Indonesia, including the temporary closedown of manufacturing activities and automotive distribution, have impacted the group’s operations substantially.
  • Astra’s car sales fell by 45 percent during the first half of the year to 139,500 units. In the second quarter alone, sales fell 92 percent against the previous quarter. Honda Astra’s motorcycle sales, meanwhile, fell 40 percent to 1.5 million units in the first half and 80 percent quarter-on-quarter.
• The Trade Ministry expects a boost in the export of some Indonesian products to Australia, including automotive products, electronics, and communication tools, as the Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA) is now in effect, according to The Jakarta Post.

VIETNAM

• Vietnam Motorcycle Manufacturers Association (VAMM) has reported sales of 518,920 motorcycles in the second quarter, down by 30.8 percent. For the first half of 2020, sales surpassed 1.24 million motorcycles. Among the members—Honda, Piaggio, Suzuki, SYM, and Yamaha—Honda Vietnam now accounts for 80 percent of the motorcycle market share in the Vietnam market, according to a MarkLines report citing Autodaily.vn.
• Vietnam’s motorcycle market has also entered a period of saturation, being unable to maintain the impressive sales growth rate as in previous years.
• The Ministry of Industry and Trade (MoIT) will focus on removing difficulties in industrial sectors in the second half of this year, especially the processing and manufacturing industry, to expand production and business, according to Viet Nam News. It plans to work closely with foreign-invested firms such as Samsung and Toyota and search for local producers to make raw materials and components to replace imports. The ministry has suggested localities develop material production regions, industrial parks and economic zones to ensure they have raw materials for domestic production.

PHILIPPINES

• The Philippines Association of Vehicle Importers and Distributors Inc. (AVID) said sales of imported vehicles in June nearly tripled to 3,697 units from just 1,239 units in May, according to Philippine Star. Despite the huge improvement month-on-month, vehicle importers still registered a 55 percent YoY drop in sales during the first half of 2020 amid the temporary closure of dealerships during the lockdown imposed by the government due to the COVID-19 pandemic. AVID said it remains watchful of factors that may continue to dampen automotive sales in the coming months. These include lower remittances, weaker demand, and the prospect of a second wave of COVID-19 pandemic.

MALAYSIA

• Following the sales tax exemption announced by the government on 5 June to boost car sales amidst the ongoing COVID-19 pandemic, Perodua has wrapped up June 2020 with an estimated 21,250 cars sold—its highest monthly sales figure so far this year and nearly triple that of last month. Perodua managed to sell 8,601 cars in March before the Movement Control Order (MCO) came into effect on the 18th day, halting the carmaker’s nationwide operations for two months. Perodua officially restarted nationwide on 19 May, managing to sell 7,886 cars before month-end.

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