New Delhi: Many countries across the globe are reeling under the pressure of the Covid-19 pandemic and lockdowns. National economies and businesses are counting costs and measuring the impact of the huge malady caused by the virus. The automotive sector, which involves a highly intertwined global supply chain to produce big-ticket items on a mass scale, is globally under stress.
According to the latest report by LMC Automotive, ASEAN Light Vehicles (LV) market is projected to clock total sales of 2,890,000 mn units in 2021, as against its previous estimate of 2,940,000 units.
Interestingly, in April 2021 ASEAN region which comprises Indonesia, Thailand, Malaysia, Philippines, Singapore, Vietnam and Brunei witnessed a jump of 388% year‐on‐year (YoY) in its LV sales. However, the huge growth was flattered by the low base in April last year, when the market recorded sales of just 50,387 units as every country in the region was under some form of lockdown, which dampened economic activity and disrupted LV demand.
| ASEAN Light Vehicles | April 2021 | April 2020 | % Growth |
| Sales | 245,972 | 50,387 | 388 |
| Production | 1,208,721 | 49,320 | 2350 |
The report mentioned that all figures are based on Light Vehicles (LV) with Gross Vehicle Weight (GVW) less than 6 tonnes.
On a year‐to‐date (YTD) basis, the ASEAN LV sales registered a 28% growth at 913,721 units, as against 714,377 units in the same period last year. However, the sales were below the January‐April 2019 period, when they stood at 1,080,000 units.
“We do anticipate a gradual improvement in LV demand going forward, but overall sales are not expected to recover to their pre‐pandemic levels until 2023, due to the prolonged nature of the crisis across the region and the delay in reopening countries for mass tourism,” the report noted.
| ASEAN Light Vehicles | Jan- April 2021 | Jan-April 2020 | % Growth |
| Sales | 913,721 | 714,377 | 28 |
| Production | 1,208,721 | 985,814 | 23 |
The report highlighted that the projections have been downgraded on account of the downwardly revised projections for Thailand, Malaysia and the Philippines. “On the plus side, we have raised the Indonesian LV outlook as sales are being boosted by the temporary tax cut policy,” it added.
Country-wise assessment
The automotive intelligence firm explained that the Malaysian government has imposed a total nationwide lockdown, dubbed FMCO, from 1-28 June. Vehicle dealerships are permitted to offer after-sales services, under strict government guidelines, but all sales activity is prohibited. To support the local auto industry, the government has extended the temporary tax cut policy from June to December 2021.
“The combination of these two factors led us to downgrade the 2021 LV outlook to 560,000 units, with the risks to the downside as the restrictions could be extended even further. We have also cut the LV sales forecasts for Thailand and the Philippines and now project sales of 830,000 units and 303,000 units, respectively, in 2021,” it noted.
| Light Vehicle Sales | January 2021 | February 2021 | March 2021 | April 2021 | Jan-April 2021 |
| Indonesia | 48,874 | 44,915 | 79,667 | 73,736 | 247,192 |
| Malaysia | 33,529 | 43,496 | 65,030 | 58,872 | 200,927 |
| Philippines | 25,175 | 28,100 | 22,440 | 19,016 | 94,731 |
| Thailand | 55,496 | 59,113 | 74,430 | 58,430 | 247,469 |
| Vietnam | 32,381 | 17,289 | 37,814 | 35,918 | 123,402 |
| Total | 195,455 | 192,913 | 279,381 | 245,972 | 913,721 |
The weaker prospects for the Thai market are due to the reinstatement of tight restrictions nationwide to curb the recent resurgence of COVID‐19. Advance figures indicate weaker‐than‐expected sales of around 50,000 units in May as the containment measures were prolonged into June. We have downgraded the forecast for the Philippines due to a few reasons namely April sales being slightly below expectations, safeguard duty is apparently undermining sales, it is possible that the social restrictions will be tightened again, and GDP shrank by a worse‐than‐expected 4.2% YoY in Q1 2021, marking economic indicators are negative.
However, LMC has raised the Indonesian sales outlook to 755,000 units this year as the market remained buoyant in April, despite the occurrence of Ramadan, with demand being boosted by the temporary Luxury‐goods Sales Tax (LST) cut.
On 14 June, however, the Indonesian government amended the temporary tax cut policy by extending the exemption period for two-wheel-drive (2WD) and sedan vehicles with engines of 1,500 cc or less, while leaving the criteria for 2WD and 4WD vehicles with engines of 1,501 cc to 2,500 ccs unchanged. The amended policy could see LV demand in Indonesia hit 800,000 units by the end of 2021.
For Vietnam’s LV forecast in 2021, the report has made nominal changes with sales set to reach an all‐time high of 440,000 units, following a marginal contraction last year.
