In February 2025, the ASEAN Light Vehicle (LV) market saw a significant 8% year-on-year increase in sales, breaking a trend of decline that had persisted since August 2023. This positive growth was a welcome change, especially considering the marginal 0.3% year-on-year increase in November 2024. However, not all countries in the region experienced the same upward trend. Thailand, for instance, continued to struggle with a 14% year-on-year drop in sales in February, marking its 21st consecutive month of contraction. The country’s volumes further declined by 1% year-on-year in March, largely due to high household debt, tightened auto loan approvals, and a weak economy.
To support the local industry in Thailand, the government introduced a policy in April to increase the auto loan guarantee for Pickups until December 2025. This move aimed to ease auto loan approvals, focusing specifically on the Pickup segment, which accounted for a significant portion of the country’s LV sales. Despite these efforts, the policy is not expected to have a substantial impact on demand, as it does not address factors such as lowering Pickup prices or reducing the cost of ownership. As a result, the country’s 2025 sales outlook has been revised downward from 593k units to 578k units due to the limited effectiveness of the government’s policy and uncertainties in the economy, particularly in goods exports.
In Indonesia, the LV market experienced a slowdown with an 11% year-on-year decline in January, followed by a 4% year-on-year increase and an 18% month-on-month rebound in February, attributed to the 2025 Indonesia International Motor Show. However, sales in March once again decreased by 3% year-on-year and 1% month-on-month, leading to an overall 4% year-on-year drop in Q1 2025 sales. Tightened auto loan conditions and an increase in VAT from 11% to 12% in January 2025 were cited as factors contributing to this decline. Consequently, the 2025-29 sales forecast for Indonesia has been lowered by an average of 4% compared to previous projections, reflecting the impact of government legislation expanding the role of military forces and reversing restrictions put in place after the Suharto dictatorship. The revised 2025 sales projection for Indonesia stands at 816k units, with potential for further adjustments given the evolving economic landscape.
In Malaysia, LV volumes saw a modest 1% year-on-year increase in February, followed by a 2% year-on-year expansion in March. This growth was attributed to aggressive sales campaigns during the Ramadan period and the introduction of new models, particularly from Chinese brands like Jaecoo and BYD. Despite stronger-than-expected sales in March, the 2025 sales outlook for Malaysia has been slightly reduced from 761k units to 759k units due to delays in upgrades and new model launches from national brands Proton and Perodua.
Vietnam, on the other hand, saw a remarkable 139% year-on-year surge in LV sales in February, driven by improvements in the economy and the timing of the Tet holiday. However, the 2025 sales forecast for Vietnam has been trimmed from 499k units to 496k units due to global trade uncertainties, particularly in the US market. In the Philippines, strong LV demand persisted with a 4% year-on-year increase in February, marking the 36th consecutive month of growth. Factors such as strong remittance inflows and low inflation rates contributed to this positive performance, leading to an upward revision of the 2025 sales outlook from 500k units to 508k units.
Overall, the ASEAN region’s 2025 sales outlook has been adjusted to 3.16 million units, reflecting revisions in Indonesia, Malaysia, Thailand, and Vietnam. The region faces downside risks from US reciprocal tariffs impacting global trade, with goods exports playing a crucial role in driving economic growth. It is essential to monitor these developments closely to adapt strategies and navigate uncertainties in the automotive market.
