ASEAN Automotive On The Road To Recovery
Despite continued softness in the market, the automotive manufacturing market is steadily moving towards recovery. According to Global data, although the global light vehicle sales fell 33.8 percent in May compared to a year ago, it showed an improvement from April when sales fell a record low of 47.5 percent. Analysts believe markets will begin the long climb back and we will begin to get more signals on market demand for the rest of the year.
In fact, China will lead the global auto market recovery. With automotive production and supplies resuming and China lifting restrictions on the movement of people and goods since early April, vehicle sales have started to stabilise.
Here, we take a look at the latest developments in the ASEAN automotive market and its road to recovery:
With phase 4 of relaxations, Federation Of Thai Industries (FTI) expects gradual recovery of the automotive market as businesses restart operations.
However, May vehicle production production was down 69.1 percent in May YOY, totaling 56,035 units. They noted that 2020 vehicle sales could be 700,000 units if the outbreak stays under control, or 500,000 units if local infections continue into September.
Furthermore, 50 percent decline is expected for the auto parts market, but the Auto Parts Industry Club expects gradual recovery of auto parts industry as Thailand enters Phase 4 relaxation
AAPICO Hitech (AH) expects losses in its Q2/2020 amid the continuing decline in the local automotive industry from the beginning of the year due to the pandemic, Marklines cited a Thun Hoon report. Among AH’s businesses is the manufacture of OEM automotive parts. The company, according to the report, plans to boost its production capability this year to serve new auto parts products.
Mazda has reported sales of 1,602 vehicles in May 2020, down by 60 percent YoY, but up by 58 percent from the previous month. In a statement, Mazda is seeing positive signs that the automotive market is gradually recovering, given increased sales in every segment.
Mazda has announced that it will resume two-shift operations at all its plants in Japan in July. Its plants in Thailand and Mexico will be operating on limited days. Mazda expects global production volume in July to increase by 50 percent from June, according to a MarkLines report citing Nikkan Jidosha Shimbun.
Auto parts maker T. Krungthai Industries Public Ltd (TKT) has over THB500 million ($16.15 million) worth of backlog order in hand, waiting to be delivered to customers, according to MarkLines, citing a Thun Hoon report. TKT expects sales to recover in the second half of 2020.
GAIKINDO, Indonesia’s automotive manufacturers association, reported Indonesia’s total vehicle sales in May 2020 were 3,551 units, down by 95.8 percent YoY due to the coronavirus. Meanwhile, the government is encouraging innovation through its Industry 4.0 program which includes the automotive industry and EV industry.
Although sales have experienced a downward trend since the beginning of the year, PT Suzuki Indomobil Sales (SIS) remains optimistic that it can increase its market share this year. From January to April 2020, Suzuki’s market share increased to 11.5 percent, compared to 9.3 percent in the same period last year. (GAIKINDO)
According to the Vietnam Automobile Manufacturers’ Association (VAMA), automobile sales declined 30.6 percent YOY to 19,081 units in May.
Vietnam ratified a free trade agreement with the European Union that will cut or eliminate 99 percent of tariffs on goods traded between the Southeast Asian country and the bloc, and provide Vietnam with a much-needed post pandemic boost, according to Bangkok Post. Vietnam will have a transition period of up to 10 years for some imports, such as cars.