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ASEAN region emerges as key market for automotive manufacturing

30 August 2013
China Daily – Asia Weekly

ASEAN region emerges as key market for automotive manufacturing

The ASEAN market is poised to become the next major hub for automotive manufacturing. Indonesia is fast catching up with Thailand as the region’s manufacturing hotspot. John Tan, Director for Greater China of Spire Research and Consulting, shared his thoughts on the outlook for the automotive industry in ASEAN edition for China Daily – Asia Weekly.

ASEAN’s automotive manufacturing output is forecasted to reach 7.05 million units by 2019. Thailand and Indonesia are set to outpace other global regions, making ASEAN the fifth largest automotive market.

Many automotive manufactures are present in Thailand due to its good base of suppliers and efficient port logistics in close proximity to production facilities. Some big players in Thailand include Toyota, Honda and Isuzu. Tan opined that Thailand has an advantage in the eco-cars sector due to aggressive promotion for investment in 2009 through cuts in corporate taxes.

Though Thailand seems like the shining star in this industry, the future looks bright for Indonesia too. Global Tier I manufacturers are heavily investing in manufacturing plants in Indonesia. The country is aiming to match Thailand as a global production hub with a strong orientation towards exports.

While existing players are looking into expansion plans, new entrants are also eager to grab a share of the thriving automotive market in Indonesia. Apart from Volkswagen and Fiat-Chrysler, manufacturers from China and India including Tata Motors, Mahindra and Mahindra, and Geely are also eyeing the Indonesian market. Malaysia has also positioned itself as a regional hub for electric and hybrid vehicles.

In contrast, the automotive industry in Vietnam and the Philippines is facing a bumpy road. Until Vietnam adopts better tax exemption measures, it looks set to be an auto importer in the region. As for the Philippines, it needs to provide better incentives for production and export to attract more car manufacturers.

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