ASEAN Market Research Services

General Overview

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What is ASEAN

ASEAN is the abbreviation for Association of South East Asian Nations, which is a geo political and economic organisation of countries in South East Asia. The organisation was formed on 8th August 1967 consisting of Indonesia, Malaysia, the Philippines, Singapore and Thailand with goals that include economic growth, protection of regional peace and stability and opportunities to discuss differences peacefully. The organisation later included Brunei, Burma (Myanmar), Cambodia, Laos and Vietnam.

ASEAN’s Economy

Altogether the ASEAN countries generate a combined nominal GDP of more than 2 trillion USD as estimated by IMF in 2012, with Indonesia leading the region at 1.2 trillion USD.

Rank	Country	Nominal GDP (million USD)	Nominal Per Capita GDP ( USD)	GDP (PPP) (million USD)	GDP per capita (PPP) (million USD)
1	Indonesia	878,198	3,592	1,216,738	4,977
2	Thailand	365,564	5,678	651,856	10,126
3	Malaysia	303,527	10,304	498,477	16,922
4	Singapore	276,520	51,162	326,506	60,410
5	Philippines	250,436	2,614	424,355	4,430
6	Vietnam	138,071	1,528	320,677	3,548
7	Burma	53,140	835	89,461	1,405
8	Brunei	16,628	41,703	21,687	54,389
9	Cambodia	14,241	934	36,645	2,402
10	Laos	9,217	1,446	19,200	3,011

International Trade

The ASEAN as a whole is the third most important trading partner for the EU after the US and China.

ASEAN’s Demography

Altogether the population of ASEAN countries totals up to 615.6 million people as estimated by IMF in 2012

Rank	Country	Population (million)
1	Indonesia	244.47
2	Philippines	95.80
3	Vietnam	90.39
4	Thailand	64.38
5	Burma	63.67
6	Malaysia	29.46
7	Singapore	5.41
8	Cambodia	15.25
9	Laos	6.38
10	Brunei	0.40

General comparison of ASEAN, China, EU and US

• Economy

Rank	Economy	Nominal GDP (million USD)	Nominal Per Capita GDP ( USD)	GDP (PPP) (million USD)	GDP per capita (PPP) (million USD)
1	European Union	16,584,007	32,518	16,092,525	32,021
2	United States	15,684,750	49,922	15,684,750	49,922
3	People's Republic of China	8,227,037	6,076	12,405,670	9,162
4	ASEAN	2,305,542	3,745	3,605,602	5,857

• Demography

Rank	Economy	Population (million)
1	People's Republic of China	1,354.04
2	ASEAN	615.60
3	European Union	502.56
4	United States	314.18

Automotive Industry in ASEAN Countries

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Automotive Sales in ASEAN Countries

The top three markets in ASEAN for commercial and passenger vehicles are Thailand, Indonesia and Malaysia. In 2012, 1.4 million, 1.1 million and 0.6 million vehicles were sold in Thailand, Indonesia and Malaysia respectively. Together these three markets account for 92% of the vehicle sales in the ASEAN region.

Different types of vehicles are popular in different countries. For example the best seller in Thailand is 1 ton pickup trucks. The best sellers in Indonesia are SUV, MPV and big trucks whereas; the best sellers in Malaysia are passenger cars.

Deutsche Bank estimated that the unit vehicle sales annual growth rate would be 10% on average between 2010 and 2015 resulting in approximately 2.7 million cars sold each year on average in the ASEAN region. It also predicted that the annual growth rate of unit vehicle sales would decline to 7% by 2020 but still resulting in more than 3.7 million cars sold each year on average by that time.

In terms of dollar amount, the total number of automotive sales in the ASEAN countries was estimated to be 63 billion in 2012.

While the largest market in ASEAN at the moment is Thailand, Indonesia is forecasted to be the largest market in the region by 2015.

Major ASEAN Vehicle Sales Volume, 2009 – 2015 (forecast)

Country	2009	2010	2011	2012	2013	2014	2015
Vietnam	119459	112224	110938	80487	75657.78	71118.31	66851.21
Singapore	79503	51891	39570	37247	32404.89	28192.25	24527.26
Philippines	132444	168496	141616	156649	168075.5	180335.5	193489.7
Malaysia	544000	616000	598000	640000	666000	672000	690000
Thailand	560000	814000	805000	1440000	1591000	1806000	1932000
Indonesia	496000	770000	897000	1120000	1443000	1722000	1978000

ASEAN Vehicle, Motorcycles and Scooter Sales Statistics

The following is statistical data from the ASEAN Automotive Federation (AAF)

• 2012 Sales - Vehicles Sales in ASEAN

Country	Passenger Vehicles	Commercial Vehicles	2012	2011	Variance(%)
Brunei	17,854	780	18,634	14,555	28%
Indonesia	780,767	335,445	1,116,212	894,164	25%
Malaysia	552,189	75,564	627,753	600,123	5%
Philippines	48,328	108,326	156,654	141,616	11%
Singapore	32,724	4,523	37,247	39,570	-6%
Thailand	694,234	742,101	1,436,335	794,081	81%
Vietnam	43,692	36,761	80,453	109,660	-27%
TOTAL	2,169,788	1,303,500	3,473,288	2,593,769	34%

• Motorcycles & Scooters Sales in ASEAN

Country	2012	2011	Variance(%)
Indonesia	7,141,586	8,043,535	-11%
Malaysia	537,753	494,586	9%
Philippines	702,599	731,130	-4%
Singapore	9,923	8,046	23%
Thailand	2,130,067	2,007,383	6%
TOTAL	10,521,928	11,284,680	-7%

• 2011 Sales - Vehicles Sales in ASEAN

Country	Passenger Vehicles	Commercial Vehicles	2012	2011	Variance(%)
Brunei	13,472	1,083	14,555	13,589	7%
Indonesia	601,945	292,219	894,164	764,710	17%
Malaysia	535,113	65,010	600,123	605,156	-1%
Philippines	44,862	96,754	141,616	168,490	-16%
Singapore	33,493	6,077	39,570	51,891	-24%
Thailand**	360,441	433,640	794,081	800,357	-1%
Vietnam	64,505	45,155	109,660	111,737	-2%
TOTAL	1,653,831	939,938	2,593,769	2,515,930	3%

** For Thailand, sales data for passenger cars will not include MERCEDES BENZ, BMW, MINI and VOLVO from November 2011 onwards

• Motorcycles & Scooters Sales in ASEAN

Country	2012	2011	Variance(%)
Indonesia	8,006,293	7,395,390	8%
Malaysia	498,076	467,941	6%
Philippines	762,947	813,361	-6%
Thailand	2,043,039	2,024,599	1%
TOTAL	11,284,680	10,480,946	8%

• 2010 Sales - Vehicles Sales in ASEAN

Country	Passenger Vehicles	Commercial Vehicles	2010	2009	Variance(%)
Brunei	12,549	1,040	13,589	12,365	10%
Indonesia	541,475	223,235	764,710	483,550	58%
Malaysia	543,594	61,562	605,156	536,905	13%
Philippines	58,691	109,799	168,490	132,444	27%
Singapore	47,273	4,618	51,891	79,503	-35%
Thailand	346,644	453,713	800,357	548,871	46%
Vietnam	58,105	53,632	111,737	119,460	-6%
TOTAL	1,608,331	907,599	2,515,930	1,913,098	32%

• Motorcycles & Scooters Sales in ASEAN

Country	2010	2009	Variance(%)
Indonesia	7,398,644	5,881,777	26%
Malaysia	468,175	432,683	8%
Philippines	759,849	636,889	19%
Singapore	8,281	8,883	-7%
Thailand	1,845,997	1,535,461	0
TOTAL	10,480,946	8,495,693	23%

ASEAN Vehicle, Motorcycles and Scooter Production Statistics

Thailand, Indonesia and Malaysia are not only the largest markets in the ASEAN region but also the major producers of vehicles. Together they account for more than 96% of motor vehicle output in the region.

• Automobile Production in ASEAN by Type

Type	2010	2011	2012
Passenger Vehicles	1.663476	1.674081	2.278573
Commercial Vehicles	1.438694	1.320548	1.959407

• Automobile Production in ASEAN Country

Country	2010	2011	2012
Thailand	1.645304	1.457795	2.453717
Indonesia	0.702508	0.837948	1.065557
Malaysia	0.567715	0.533515	0.56962
Philippines	0.080477	0.064906	0.075413
Vietnam	0.106166	0.100465	0.073673

Deutsche Bank predicted that 6 million cars and trucks would be manufactured in the region in 2020.

Production Statistics

The following is statistical data from the ASEAN Automotive Federation (AAF)

• 2012 Production - Vehicles Production in ASEAN

Country	Passenger Vehicles	Commercial Vehicles	2012	2011	Variance(%)
Indonesia	743,501	322,056	1,065,557	837,948	27%
Malaysia	509,621	59,999	569,620	533,515	7%
Philippines	26,340	49,073	75,413	64,906	16%
Thailand	957,623	1,496,094	2,453,717	1,457,795	68%
Vietnam	41,488	32,185	73,673	100,465	-27%
TOTAL	2,278,573	1,959,407	4,237,980	2,994,629	42%

• Motorcycles & Scooters Production in ASEAN

Country	2012	2011	Variance(%)
Indonesia	7,079,721	8,006,293	-12%
Malaysia	543,088	498,076	9%
Philippines	588,292	762,947	-23%
Thailand	2,606,161	2,043,039	28%
TOTAL	10,817,262	11,310,355	-4%

• 2011 Production - Vehicles Production in ASEAN

Country	Passenger Vehicles	Commercial Vehicles	2011	2010	Variance(%)
Indonesia	561,863	276,085	837,948	702,508	19%
Malaysia	488,261	45,254	533,515	567,715	-6%
Philippines	24,591	40,315	64,906	80,477	-19%
Thailand	537,987	919,808	1,457,795	1,645,304	-11%
Vietnam	61,379	39,086	100,465	106,166	-5%
TOTAL	1,674,081	1,320,548	2,994,629	3,102,170	-3%

• Motorcycles & Scooters Production in ASEAN

Country	2011	2010	Variance(%)
Indonesia	8,006,293	7,395,390	8%
Malaysia	498,076	467,941	6%
Philippines	762,947	813,361	-6%
Thailand	2,043,039	2,024,599	1%
TOTAL	11,310,355	10,701,291	6%

• 2010 Production - Vehicles Production in ASEAN

Country	Passenger Vehicles	Commercial Vehicles	2010	2009	Variance(%)
Indonesia	496,524	205,984	702,508	464,816	51%
Malaysia	522,568	45,147	567,715	489,269	16%
Philippines	33,161	47,316	80,477	62,523	29%
Thailand	554,387	1,090,917	1,645,304	999,378	65%
Vietnam	56,836	49,330	106,166	107,760	-1%
TOTAL	1,663,476	1,438,694	3,102,170	2,123,746	46%

• Motorcycles & Scooters Production in ASEAN

Country	2010	2009	Variance(%)
Indonesia	7,395,390	5,884,021	26%
Malaysia	467,941	436,430	7%
Philippines	813,361	634,032	28%
Thailand	2,024,599	1,634,113	24%
TOTAL	10,701,291	8,588,596	25%

Competitive Landscape

Japanese players have been dominating the ASEAN automotive industries for as long as anyone could remember. They have been solidly occupying the largest market shares or the second largest market shares in the three largest markets in ASEAN.

To give an illustration of how dominant the Japanese players are in Indonesia, let us take a look at Toyota Motor. Toyota Motor which has been in Indonesia for 40 years has 450 dealerships and a market share of 54%. In contrast, General Motors which has been in Indonesia even longer, since 1938, only has 34 dealerships and less than 1% market share.

Toyota Group together with its affiliates and partners now sells half a million cars annually in Indonesia, which is approximately the size of the whole automotive market sales in the whole country of Malaysia in 2012. Nissan Motor Co’s Chief Operating Officer has been quoted calling Indonesia as a “Toyota Republic”. Being a Japanese brand, this goes to show how dominant Japanese players are in Indonesia and hence ASEAN as it is forecasted to be the largest market in the region in the near future.

Automotive Production Capacity in ASEAN - Forecast

The lucrative automotive sales market in the ASEAN region as reflected by the forecasted significant increase in vehicle demand in the ASEAN countries has prompted leading players in the industry to either expand production capacity or open new manufacturing plants in the region. 

In 2012 Toyota announced that it would invest an additional $200 million beyond expansion plans announced the previous year, lifting its Indonesia capacity to 230,000 vehicles annually by 2014. This would more than double today's output.

After leaving the country seven years ago, GM recently, in 2013, invested 150 million USD to reactivate a plant for producing seven-seat van in Indonesia. The plant is expected to produce 40,000 vehicles annually both for the domestic and export market.

In 2012 Ford opened a $450 million plant in Thailand with an output capacity of 150,000 cars per year to meet rising demand in neighbouring countries.Ford’s South East Asia operation recorded a 90% growth in sales in Indonesia in 2012. Peter Fleet, considered the low level of car ownership in Indonesia along with the growing GDP per capita a strong indication of a take-off point.  “This is going to be a period of unprecedented growth in Indonesia" said the president of the South East Asia operations. 

China's Zhejiang Geely Holding Group Co. is also looking to expand its vehicle-assembly capacity in Indonesia.

South Korea's Hyundai Motor Co. who expects its sales to climb around 35% considers building a factory as a move to upgrade from the current assembly facility in Indonesia as reported by Jongkie Sugiarto, president director of PT Hyundai Mobil Indonesia.

Suzuki Motor announced expansion plan that would almost double its capacity in Indonesia to manufactures 150,000 four-wheeled vehicles annually. It will spend $780 million for this. Suzuki is also negotiating tax incentives with the Indonesian government that would allow it to produce eco-friendly cars in Indonesia.

Bosch, the leading global supplier of technology and services has announced plans in 2013 to establish its first manufacturing facility in Indonesia. The facility which would be located in the greater Jakarta area and commence production in 2014 will manufacture automotive products primarily for Japanese automakers in Indonesia. The company plans to invest 10 million euros and employ more than 120 people in the next three years.

Nissan Motor and Daihatsu Motor are planning to expand capacity as well.  And the list goes on.

Different dynamics at the three largest automotive markets in ASEAN

Automotive Spare Parts in ASEAN- Aftermarket analysis

The Philippines

The Philippines are not among the top 3 automotive markets in ASEAN but it is worth mentioning as it is poised to become the largest manufacturer of automobile parts, specifically transmission assemblies. It has recently beaten Japan in exporting vehicle transmission assemblies to the ASEAN region. Japanese companies operating in the Philippines which include Toyota, Mitsubishi and Isuzu export approximately $3.5 billion worth of spare parts compared to Japan’s $1.1 billion annually.
The Philippines account for ~25% of vehicle parts exported to the ASEAN region, and nearly all of them are accounted for transmission assemblies.
Other signs that the Philippines is becoming the manufacturing hub of transmission assemblies include the fact that three of the largest Japanese automotive manufacturer have been heavily active in producing these transmission assemblies in the Philippines.

Indonesia

Two of the largest manufacturers and distributors of automotive components in Indonesia are PT Astra Otoparts, a subsidiary of PT Astra International and PT Indomobil Sukses International. PT Astra Otoparts is considered to be the largest as it supplies automotive components for Toyota and Daihatsu which holds the largest and second largest market shares in Indonesia respectively. PT Astra Otoparts distributes component for Toyota, Daihatsu, Isuzu, UD Trucks, Peugeot, BMW, and Honda brands whereas PT Indomobil Sukes International distributes components for Audi, Foton, Great Wall, Hino, Kalmar, Liugong, Manitou, Nissan, Renault, Renault Trucks, Suzuki, Volkswagen, Volvo, Volvo Trucks and Mack Trucks brand.

Comparison of Automotive Industry in ASEAN with that of China, EU and US

Vehicle population (numbers are estimates for 2012)

EU: ~260 million units
US: ~250 million units
China: ~60 million units
ASEAN: ~30 million units

Vehicle ownership density (estimates for 2012)

US: ~800 vehicles per 1000 inhabitants
EU: ~500 vehicles per 1000 inhabitants
China: ~50 vehicles per 1000 inhabitants
ASEAN: ~40 vehicles per 1000 inhabitants
The relatively much smaller number in ASEAN countries potentially indicate a much pent-up demand yet to be tapped.

New vehicle sales (estimates for 2012)

US: ~14.5 million new vehicles
EU: ~12 million new vehicles
China: ~15 million new vehicles
ASEAN: ~ 3.5 million new vehicles

Automotive Brands preference and market leaders in ASEAN, EU, US & China

China: American brands dominate.
Popular brands: GM (14.7% market share in 2012), Volkswagen AG (14.6% market share in 2012), Ford. Western brands are more popular than local ones due to the low quality perception of cars produced by local companies.

ASEAN: Japanese brands dominate.
Popular brands: Toyota, Honda, Mitsubishi.
Except in Malaysia where Japanese brands take 25% of the market share, in Indonesia and Thailand Japanese brands take close to 90% of the market shares.

EU: European brands dominate.
Popular brands: Volkswagen (25.7% market share in 2012 from 23.7%), Peugeot (10.9% from 11.7%), Vauxhall/Opel (6.9% in 2012).
Daimler AG (5.7% in 2012 from 5.2%), Fiat (6.1% from 6.3%), Renault (8.6% from 10.6%), Ford (6.5% in June 2013)

US:  American brands dominate the market.
Popular brands: Detroit/Buick, Cadillac, Chevrolet, Chrysler, Dodge, Ford, GMC, Jeep, Lincoln, and Ram
American brands dominate while Japanese brands follow in second. 2012 data shows that in 2012 American brands, Japanese brands, European brands account for 44.7% account for 36.9%, account for 9.5% and Korean brands account for the rest 8.9%

Analysis and potential implication – Japanese automotive players dominate

Japanese cars dominate the ASEAN market potentially due to the following reasons:

1. Japanese cars have a reputation for reliability, which allow second hand cars of these brands able to maintain higher prices than comparable cars. This is true even in the US market.
2. Lower import tariff for cars coming from Japan
3. The fact that smaller Japanese cars fit better in ASEAN’s relatively smaller roads
4. Early mover advantage of Japanese auto makers who moved into the ASEAN market before most other car makers. These automakers have also stuck it out through the Asian financial crisis and other economic and political instability, increasing consumers’ familiarity with their product ranges over time.

In general, Japanese cars have superior intrinsic values. Their reputation for quality and reliability makes it easy for various international markets to accept them. What make them less well received in certain countries are other reasons such as political or social reasons instead of reasons related to the intrinsic values of the cars themselves.

For example, in the case of China, consumers who generally pay high attention to the value to price ratio would generally welcome Japanese cars that are generally optimally priced if not due to political and social tensions between the two countries regarding the Senkaku or Diaoyu island dispute, where the two countries claim for ownership.

In the case of the US, the high quality of Japanese cars has earned them their esteemed second place in terms of the US market share. The reason why a considerable number of Americans still prefers American brands are more due to the sense of nationalism to support the local automotive industry, which indeed is essential to the whole American economy. These consumers wanted to support job creations and job preservations in the US automotive industry. Putting this aside, a sizable number of American consumers consider foreign cars—especially Japanese cars—to be more superior in terms of price, mileage, gas efficiency and reliability compared to local ones albeit these foreign cars are locally assembled. Such sentiment and perception are not uncommon in the US market.

Source: ICIS, National Auto Association and Solidiance Analysis

But growth is seen the fastest in ASEAN followed by China. Meanwhile, the EU market is seeing a decline in total market size of passenger cars

Source: ICIS, National Auto Association and Solidiance Analysis

Sources:
Shirouzu, Norihiko, “GM Takes on the Toyota Republic”, Jakarta Globe, June 2013