Malaysia officially surpassed Thailand to become the second largest automobile market in Southeast Asia.

Main content Hide / Show Car sales in Malaysia grow strongly Many Southeast Asian markets are `out of breath`

Malaysia has overtaken Thailand to become Southeast Asia’s second-largest auto market, after Indonesia, marking a major shift in a region that has become a key battleground for Asian automakers.

Nikkei Asia compiled sales data published by industry groups in these three countries along with the Philippines and Vietnam, and found that Malaysia’s sales figures, for a long time, were ranked third.

According to the Malaysian Automobile Association, car sales increased 5% in the first quarter compared to the same period last year to 202,245 vehicles.

Tax exemptions for domestically produced vehicles – part of the government’s economic stimulus package – have given a boost to domestic auto brands such as Perodua and Proton, which have about 60% of the market share.

The tax exemption began in 2020 and although it ended in mid-2022, fulfillment of tax-free orders continued to drive sales in 2023, according to the association.

“The launch of many new models including electric vehicles at competitive prices has helped boost sales,” the association said in a statement.

Ivan Khoo, a Toyota sales agent in Kuala Lumpur, told Nikkei Asia that sales in the first two months of 2024 were better than expected and that the Vio model was the most popular because it was priced under 100,000 ringgit (21,000 ringgit).

`I see both segments, Toyota’s internal combustion engine vehicles and hybrid vehicles, continuing to do well,` Khoo said.

In contrast, car sales in Thailand are in decline.

Thailand’s monthly auto sales have declined year-on-year since June last year as the number of unfulfilled auto loans increased and shopping demand plateaued. Notably, market share

Vietnam is the 5th largest automobile market in Southeast Asia in the first quarter of 2024

Similarly, the `sales king` in the region, Indonesia, also lacks growth momentum. The number of cars sold in the first quarter decreased by 24% compared to the same period last year while interest rates increased, causing consumers to limit purchases.

Meanwhile, sales in 2023 just surpassed 1 million vehicles, down 4% compared to 2022 and 30,000 vehicles lower than the year before the COVID-19 pandemic (2019), and did not reach the target of 1.05

Auto sales in Vietnam dropped 16% in the first quarter.

Although there was a surge in demand in December 2023 before the expiration of registration fee reductions for domestically produced vehicles, sales returned to a year-on-year decline in January and February.

Meanwhile, sales in the Philippines grew 13% in the first quarter, the most among the five countries, after inflation eased to about 4% by the end of 2023 and consumer spending remained steady.

As automakers from China, Japan, South Korea and other countries increasingly compete in Southeast Asian nations with growing middle classes, subsidies and economic conditions

The Malaysian Automobile Association expects a 7.5% decline in total vehicle sales this year, although sales of hybrid and electric vehicles are expected to increase.