Malaysia overtakes Thailand as ASEAN's second-biggest auto market

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

It compiled sales data released by industry groups in those three countries plus the Philippines and Vietnam and found that Malaysia's sales figures, which had been third for a long time, topped Thailand's for three consecutive quarters through January-March 2024.

According to the Malaysian Automotive Association, auto sales increased 5% in the first quarter from a year earlier to 202,245 vehicles. This followed an 11% increase in 2023 to a record 799,731 vehicles.

Sales tax exemptions for domestically produced vehicles - part of the government's economic stimulus package -- provided a tailwind for the national car brands Perodua and Proton, which held about 60% of the market share.

Figures in the Philippines increased 13% in the first quarter, the highest among the five countries, after inflation eased to around 4% in late 2023 and as consumer spending remained strong.

Sales in Thailand have been in a slump. The country had long held the second place until sales fell 25% in the first quarter from a year earlier.

Thailand's monthly auto sales have declined year-on-year starting last June due to increasing nonperforming auto loans and general stagnant consumption. The share of electronic vehicles is growing thanks to the entry of Chinese makers.

Indonesia also lacks momentum. Auto sales in the first quarter fell 24% from a year earlier as interest rates rose, leading consumers to hold back on purchases.