March 2018

ASEAN Light Vehicle Sales Update

2018 ASEAN Light Vehicle Forecast Raised Despite February Decline

Following January’s double-digit growth, ASEAN Light Vehicle (LV) sales in February dipped by 1% year-on- year (YoY) as downturns were seen across every market except Thailand.

The Thai LV market increased by 11% YoY, marking the sixth consecutive month of double-digit growth, thanks largely to the Sub- segment and particularly strong performances by the , NOTE and Yaris ATIV (the sedan variant of the Yaris). The positive economic picture supported the overall market as a) GPD grew by 4% YoY in Q4 2017 and hit a five-year high of 3.9% last year; b) goods exports increased by an average of 14% YoY between January and February; and c) the private consumption index rose by 4.4% YoY in first two months of 2018, compared to 3.4% YoY in Q4 2017.

In light of this better-than-expected sales outturn and the encouraging economic indicators, we revised our sales forecast for Thailand upward to a total of 892k units.

Indonesia’s Passenger Vehicle (PV) market declined by 5% YoY in the month, dragging the overall LV result down by 3% YoY. The weak PV outturn resulted directly from the rise in non-performing loans and tighter credit conditions putting pressure on Low Cost Green Car (LCGC) sales, which plunged by 14% YoY. A further depreciation in the value of the rupiah this year also hampered consumer purchasing power. In contrast, Light Commercial Vehicles (LCV) sales increased by 6% YoY, driven by export growth (+10% YoY) in the first two months of 2018 and a boost in public infrastructure spending.

In spite of the lackluster PV market, our 2018 Indonesian sales forecast remains unchanged as new generations of the country’s bestselling models – the /Daihatsu Xenia and Ertiga – are due to hit the market, which should help to lift demand over the remainder of the year.

The LV markets in Malaysia and Vietnam dropped by 5% and 9% YoY, respectively, in February as sales were distorted by the timing of the Chinese New Year holiday and the Vietnamese Tet Lunar festival. The Malaysian market is likely to have rebounded in March, however, when working days returned to normal. Perodua’s shorter delivery times for the highly popular Myvi should lend further support to the market. We therefore left our forecast for Malaysia unchanged and continue to project a total of 582k units sold in 2018.

Despite the decline in Vietnam in February, sales were still better than anticipated, particularly in the PV segment. In addition, GDP growth in 2018 is forecast at 6.6%, which should help to support overall LV demand. This led us to revise our full-year outlook upward to 309k units sold.

The LV market in the Philippines in February declined by 8% YoY, as the implementation of the new excise tax pulled demand ahead to last year. The market also took a hit from a hike in vehicle prices in mid-January. We made a slight downward revision to our 2018 forecast for the Philippines, on the back of the lower-than- expected February result, and now envisage a total of 433k units sold. We should also bear in mind the increasing negative headwinds that may impact LV demand this year, including a) higher inflation from the weak peso and the new excise tax; and b) a more cautious approach to spending, as highlighted by the latest consumer confidence index.

In summary, our overall ASEAN LV forecast for 2018 was revised upward from 3.24 mn units in our last report to 3.27 mn this month, in light of the improved outlooks for the Thai and Vietnamese markets.

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ASEAN Light Vehicle Sales Update

ASEAN Top Lines Market Performance

Feb Growth YTD Growth 2018 Growth Feb Growth Share YTD Growth Share Sales 254,206 0% 525,802 6% PV 39,742 15% 54% 75,255 20% 54% Thailand LCV 33,870 6% 46% 63,464 7% 46% PV 181,513 -1% 379,995 5% 2,437,609 4% PV 36,671 -5% 91% 76,726 -3% 91% LCV 61,867 0% 124,565 7% 829,375 6% Malay sia LCV 3,455 -3% 9% 7,188 -9% 9% M&H CV 10,826 4% 21,242 9% PV 70,022 -5% 81% 142,276 0% 81% Indonesia Production 334,932 2% 707,649 9% LCV 16,460 6% 19% 32,962 15% 19% PV 23,907 -8% 82% 52,489 -1% 81% PV 213,897 -1% 466,374 8% 2,656,404 -1% Philippines LCV 5,316 -8% 18% 12,085 2% 19% LCV 109,393 8% 217,931 11% 1,248,983 4% PV 11,171 10% 80% 33,249 34% 79% Vietnam M&H CV 11,642 15% 23,344 28% LCV 2,766 -47% 20% 8,866 -2% 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 164,343 -12% 37,695 2% 7,725 -30% 87,771 -14% 23,034 -12% 8,118 -11%

RNM 78,769 50% 22,783 27% 4,980 7% 32,102 108% 16,892 33% 2,012 17%

Honda Group 65,233 -12% 18,238 4% 15,131 -7% 25,466 -23% 4,141 -16% 2,257 27%

Perodua Automotiv e 34,830 13% 0 N/A 34,830 13% 0 N/A 0 N/A 0 N/A

Suzuki Group 30,783 43% 3,823 28% 0 N/A 22,626 49% 3,482 34% 852 20%

Isuzu Motors 29,507 -2% 23,663 -1% 1,403 -5% 1,337 16% 2,526 -24% 578 48%

Hy undai Group 21,993 32% 998 35% 1,253 -21% 294 -1% 6,019 -14% 13,429 90%

Mazda Motors 20,731 56% 9,940 52% 2,314 83% 799 626% 634 -9% 7,044 50%

Ford Group 19,528 12% 10,463 40% 897 -15% 0 N/A 4,597 3% 3,571 -19%

DRB-Hicom 8,643 -35% 3 -70% 8,640 -35% 0 -100% 0 N/A 0 N/A

19th April 2018

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

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