February 2018

ASEAN Light Vehicle Sales Update

ASEAN Light Vehicle Market Increases by 11% YoY in January 2018

In January 2018, total ASEAN Light Vehicle (LV) sales increased by 11% compared to the same month last year. This impressive result was driven by growth in every market except Malaysia, where sales declined by 2% year-on-year (YoY).

Last December, automakers in Malaysia offered aggressive discounts, which pulled sales ahead, hence the downturn in January this year. Indeed, at 54k units sold, December 2017 marked the highest sales month last year, compared to an average of around 48k units in every other month. January’s total was also impacted by massive demand for the all-new Myvi, which led to a supply shortage. Local media reports indicate that that Perodua received 60k advance orders for the Myvi from mid-November 2017 to mid-March 2018, but delivered only 28k units of the model.

Despite this downturn in the opening month of the year, the Malaysian LV market is still expected to post modest growth of 1.7% YoY, on sales of 582k for the full-year 2018. Support will come from new models launched by the country’s two national brands, as well as a strong rebound in exports, lower inflation from the strengthening ringgit, and additional government spending under the 2018 Budget, ahead of the upcoming general election.

Sales in Thailand in January rose by 17% YoY, driven by a recovering economy and improving consumer confidence. With growth of 26.4% YoY, the PV segment made a substantial contribution to the increase, while the CV segment rose by 7.2% from the same month in 2017. Driving the upturn in PV sales were new entries in the Sub-Compact Car and SUV segments, particularly the Yaris ATIV and Nissan NOTE in the former, and the MG ZS, Honda CR-V and Mazda CX-5 in the latter.

This year, we expect buyer sentiment in Thailand to remain positive as new models hit the market and the economy continues to improve. Despite the stronger-than-expected result in January, however, we decided to leave our full-year forecast unchanged, with only minor adjustments. For 2018 as a whole, we project growth of 3% YoY, on a total of 874k units sold.

The Indonesian LV market kicked off 2018 with a 9% increase compared to January 2017, with every major player posting a positive result, with the notable exception of Toyota and Honda.

Toyota’s volume suffered from the transition period of the Avanza, ahead of the H2 launch of the all-new version; lower sales of the Calya and Sienta 7-seat MPVs as both models were cannibalized by the new Rush 7-seat SUV; and the wait for the launch of the facelifted Yaris in March. In turn, Honda’s sluggish performance resulted from a drop in demand for the aged HR-V, while the Mobilio and BR-V 7-seaters lost momentum to their main rivals, the Toyota Rush and Terios.

The Indonesian market is projected to increase by 4.5% YoY to 1.05 mn units this year, following a 0.3% dip in 2017. Support will come from new generations of the bestselling Toyota Avanza/Daihatsu Xenia, the government’s new Low Carbon Emission Vehicles (LCEV) incentive policy, and low inflation and interest rates.

Vietnam enjoyed a 51% YoY surge in January, driven by domestically assembled models, following the government’s shock policy U-turn that saw the implementation of a non-tariff barrier (Decree 116) to protect the local manufacturing industry, in lieu of eliminating the tariff on CBUs imported from other ASEAN markets, as originally anticipated.

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ASEAN Light Vehicle Sales Update

Locally built models will continue to drive growth in Vietnam in H1 2018, as imported vehicles are likely to be in short supply in the coming months. For 2018, volumes are seen to pick up by a robust 21.5% YoY to 297k units, reversing last year’s decline, as buyers who waited for as long as a year to buy a cheaper import are likely to purchase a vehicle this year, particularly as the Vietnamese economy continues to boom.

LV sales in the Philippines were in positive territory in January (+3% YoY), in spite of a new tax hike on the first day of the month. This upturn was driven in part by th e fact that several automakers did not increase their vehicle prices as soon as the tax hike came into force, opting instead to leave them unchanged for a limited period. However, as prices are bound to rise eventually to offset the new tax, we continue to project a 5% YoY decline, on total sales of 435k units for the full-year 2018.

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ASEAN Light Vehicle Sales Update

ASEAN Top Lines Market Performance Jan Growth YTD Growth 2018 Growth Jan Growth Share YTD Growth Share Sales 270,275 12% 270,275 12% PV 35,513 26% 55% 35,513 26% 55% Thailand LCV 29,594 7% 45% 29,594 7% 45% PV 197,396 11% 197,396 11% 2,420,360 3% PV 40,056 0% 91% 40,056 0% 91% LCV 62,463 14% 62,463 14% 815,469 4% Malay sia LCV 3,733 -14% 9% 3,733 -14% 9% M&H CV 10,416 14% 10,416 14% PV 72,207 6% 81% 72,207 6% 81% Indonesia Production 370,243 16% 370,243 16% LCV 16,466 26% 19% 16,466 26% 19% PV 27,600 1% 80% 27,600 1% 80% PV 250,500 16% 250,500 16% 2,656,404 -1% Philippines LCV 6,811 12% 20% 6,811 12% 20% LCV 108,041 13% 108,041 13% 1,248,983 4% PV 22,020 49% 79% 22,020 49% 79% Vietnam M&H CV 11,702 45% 11,702 45% LCV 5,859 55% 21% 5,859 55% 21%

Group Sales Performance ASEAN GROWTH RATE YTD VOLUMES

= Month = YTD Asean Thailand Malaysia Indonesia Philippines Vietnam -50% -25% 0% 25% 50% 75% 100% Volume Grow th Volume Grow th Volume Grow th Volume Grow th Volume Grow th Volume Grow th

Toy ota Group 83,709 -6% 17,240 13% 3,671 -41% 44,266 -8% 13,299 -2% 5,233 -4%

RNM 39,445 56% 10,672 28% 2,960 26% 15,702 124% 8,757 33% 1,354 31%

Honda Group 34,695 -6% 9,109 16% 8,133 -5% 13,572 -20% 2,126 -7% 1,755 42%

Perodua Automotiv e 17,693 25% 0 N/A 17,693 25% 0 N/A 0 N/A 0 N/A

Isuzu Motors 14,750 0% 11,438 -7% 745 -4% 693 27% 1,680 69% 194 63%

Suzuki Group 14,551 47% 1,407 31% 0 N/A 11,511 62% 1,110 -14% 523 24%

Hy undai Group 12,927 62% 555 48% 657 -26% 149 9% 3,016 -18% 8,550 194%

Mazda Motors 11,617 58% 4,539 38% 1,300 62% 406 472% 332 4% 5,040 75%

Ford Group 10,643 13% 4,968 43% 429 -27% 0 N/A 2,737 -4% 2,509 -1%

DRB-Hicom 4,785 -34% 2 -75% 4,783 -34% 0 N/A 0 N/A 0 N/A

19th March 2018

For further information contact Ms. Sukanya Tunhau, Phone +662 264 2050, [email protected]

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