New vehicle sales in the six largest markets of the ASEAN region experienced a slight decline during the fourth quarter of 2022, reaching an estimated total of 920,000 units. This decrease followed a period of robust growth in previous quarters. This information is based on data collected from various industry sources, including vehicle manufacturers, trade associations, and government departments.
The drop in sales can be attributed to several factors. Firstly, the comparison with strong data from the previous year, when markets rebounded significantly from the pandemic-induced lows, contributed to the decline. Secondly, ongoing semiconductor shortages impacted vehicle deliveries. Moreover, sales in Thailand were negatively impacted by localized flooding during the last two months of the year. While other markets also experienced slower growth, Vietnam saw a substantial 35% decrease in sales during the fourth quarter.
Despite these challenges, the economic growth across the ASEAN region remained robust in the fourth quarter. This growth was driven by the recovery of international travel and tourism during the second half of the year, increased demand for commodities, higher investment rates, and domestic consumption. Most markets in the region have successfully returned to their pre-pandemic levels. Malaysia reported the strongest growth, with a nearly 42% increase in sales to a record of 720,658 units last year, followed by the Philippines and Vietnam. Indonesia maintained its position as the largest market, with sales rising over 18% to 1,048,040 vehicles, accounting for approximately 31% of the regional total.
Here is a breakdown of the situation in individual markets:
Philippines
The Philippines experienced a remarkable sales surge of over 36% in the fourth quarter of 2022, with sales reaching 104,442 units compared to 76,549 units the previous year. The market had already rebounded to pre-pandemic levels, showing an almost 29% increase in full-year sales to 369,000 units from 285,694 units in 2021. The country's GDP grew by an estimated 7.6% in 2022, driven by robust consumer spending and investment. In response to inflation, the central bank increased its benchmark interest rate to 5.5%.
Vietnam
Vietnam saw a sharp decline of 35% in sales during the fourth quarter of 2022, with 93,112 units sold compared to a strong 142,852 units in the same period the previous year. This decrease was attributed to the exceptional rebound in the market in the previous year. Full-year sales, however, increased by more than 29% to 358,063 units, supported by an economic growth rate of over 8%. Notably, sales growth in the service sector was 10%.
Indonesia
In Indonesia, new vehicle sales increased by nearly 12% in the fourth quarter of 2022, totaling 289,824 units compared to 259,665 units during the same period the previous year. The country's vehicle market successfully returned to pre-pandemic levels over the past two years, with full-year sales increasing by more than 18% to 1,048,040 units from 887,202 units in 2021. The economy expanded by an estimated 5.5% in 2022, supported by international tourism's return, rising commodity prices, increased private investment, and strong consumer spending. The local industry introduced policies to boost electric vehicle (EV) adoption.
Thailand
Thailand witnessed a sales decline of over 6% in the fourth quarter of 2022, with sales reaching 215,701 units compared to 230,044 units the previous year. This decline was attributed to localized flooding in the final months of the year and ongoing semiconductor shortages. The economy grew by an estimated 3.4% in 2022, driven by domestic consumption and a resurgence of international tourism. Thailand's central bank increased its benchmark interest rate to 1.25% in response to economic conditions.
Malaysia
In Malaysia, new vehicle sales increased by just over 7% in the fourth quarter of 2022, reaching 203,860 units compared to 190,084 units the previous year. The country's market rebounded strongly from the pandemic-induced lows, with full-year sales surging by 42% to 720,658 units from 508,883 units in 2021. The market growth was supported by economic activity rebounding and government stimulus policies. Notably, sales tax exemptions for electric vehicles (EVs) led to a tenfold increase in EV sales in 2022.
Despite the strong performance in 2022, concerns about the sales outlook for 2023 exist due to the withdrawal of pandemic-related sales incentives, rising interest rates, inflation, and slowing global economic growth impacting exports and commodity prices. The ASEAN region is carefully considering these factors as it navigates the coming year.
