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Japanese cars are losing sales in Southeast Asia

Toyota, Honda and Nissan received their first regional sales decline in four years, while Korean and Chinese vehicles wanted to gain market share.

The Southeast Asian auto market is on the decline for the first time in four years as the Thai baht has strengthened significantly and the global economy is bleak, which has undermined confidence among automakers and consumers. This is a blow to the Japanese automakers, still enjoying the majority of the pie of production and sales of the region. Despite the recession, competitors from South Korea and China are on a roadmap to gain market share by launching electric cars.

The main theme at Thailand International Motor Expo, opened on November 29 in Bangkok, is that cars can save money on gas. Toyota launched the new small-sized Yaris, equipped with an engine that increases fuel efficiency by about 15%. Prices start at $ 17,806, about the same as its predecessor.

Honda also presented the City sedan, which is fuel efficient and affordable. Nissan's all-new Almera model shares the same characteristics. Both companies aim to revive sales in Thailand, one of the largest markets in Southeast Asia, where 90% are held by Japanese giants.

However, real sales in Thailand were 10% lower than the same figure in the same period last year in September and October. With sales rising only 1% during the first 10 months of this year, year-round sales. is likely to decline for the first time in the past three years.

Mazda has lowered its Thailand sales target this year from 75,000 to 65,000 units.

"We just sold two cars in November," a sales representative of a Japanese car dealership in Bangkok said. "We have eliminated all prepayments and offered a discount, but still cannot sell."

The main reason behind the slowdown of the Thai market is that the baht is fluctuating, rising to a record high in the past 6 years against the USD. Since the beginning of this year, the Thai currency has risen approximately 7%, and now reaches 30 baht per dollar, creating upwinds for an export-dependent economy.

Moreover, China is suffering from the economic downturn as a result of the trade war with the US. Thai exports here have dropped 6% this year in mid-January value compared to October.

As a result, Thailand's economy grew slowly by 2.4% in the third quarter, an unprecedented level since 2014, the year of the military coup. Poor profits at companies also affect consumer spending.

"Everything will be difficult until mid 2020," said Michinobu Sugata, president of Toyota Thailand.

In Indonesia, where the auto market is on par with Thailand, new car sales are down 12% between January and October compared to the same period last year. The global economic downturn has led to lower coal and palm oil prices, which are the main export items for Indonesia.

Exports decreased by 10 to 20% in the first 10 months of this year. Purchasing power of automakers and consumers is therefore equally affected.

Japanese automakers also control more than 90% of the Indonesian car market. But Nissan will stop assembling cars in Indonesia starting next year and focus on making engines for partner alliance Mitsubishi.

Nissan reintroduced the Datsun brand under President Carlos Ghosn as a strategic brand for emerging markets, but this car only accounts for 2% market share in Indonesia. Datsun faces stiff competition from Toyota and its Osaka-based subsidiary, Daihatsu.

In Malaysia and the Philippines, new car sales remained sluggish for the first 10 months. Among the six major countries in Southeast Asia, in Vietnam and Singapore, car sales fell 3% in the same period, placing the region on the first decline in sales in 4 years.

However, Hyundai said on November 26 that it would set up its first factory in Indonesia, with a plan to invest about US $ 1.55 billion by 2030. The plant will start operating in the second half of 2021. with a capacity of 150,000 vehicles / year. Later production will increase to 250,000.

Hyundai is looking to build electric cars at its factory in Indonesia, hitting a segment that Japanese automakers have ignored in Southeast Asia. Meanwhile, China's SAIC Group is focusing all its efforts on electric cars in Thailand.

SAIC's joint venture with Thai conglomerate Charoen Pokphand Group launched Chinese electric cars in June under the British brand MG. Prices start at $ 39,300, 40% cheaper than the Nissan Leaf.

MG holds a 2.5% market share in Thailand for January to October sales, enough to occupy the 8th position on Suzuki.

Mai Huyen


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