The latest FT Confidential Research survey of Asean-5 consumers indicates falling demand for autos in the second half of the year. FTCR’s Auto Purchase Index, which measures the six-month outlook for auto sales, fell in Indonesia and Thailand, the region’s two biggest markets, as well as in the Philippines. Meanwhile, our Motorcycle Purchase Index (MPI) rose slightly in four of the five countries, indicating sales of two-wheelers may pick up.

  • In Indonesia, the index slid to 22.1 from 26.6 in the previous quarter. Year-to-date through May, auto sales have increased six per cent versus the same period last year, but the lower reading this quarter suggests deceleration ahead as Indonesians report slower growth in discretionary spending and household income.
  • The index for Thailand fell to 26.2 from 27.7. While auto sales have risen 12.4 per cent year-to-date in Thailand, due partly to a low base effect on weak demand last year, growth stalled in May at just 0.6 per cent over the same month last year. 
  • The index rose to 25 in Malaysia, from 21.8 in the first quarter. Malaysians have become more optimistic about the economy in recent months, as reflected in our latest Economic Sentiment Index.
  • The index slipped in the Philippines, from 27.2 previously to 25.6. This marks the second consecutive decline and suggests that sales growth will continue to decelerate later this year. The country’s nascent auto market experienced 24.6 per cent growth last year, but this has slowed to 17.9 per cent year-to-date through May.
  • In Vietnam, the reading improved to 16.5 from 14.6 in the first quarter as Vietnamese consumers look ahead to 2018, when tariffs will be eliminated on auto imports from within Asean.

  • Meanwhile, FTCR’s Motorcycle Purchase Index ticked upward in four of the five countries, with only Malaysian respondents indicating a slight decrease. As we reported last quarter, overall Asean-5 motorcycle sales will probably contract this year due to weak demand in Indonesia, where sales have fallen 9.5 per cent through May. Indonesia accounts for half of all motorcycle sales in the Asean-5. 
  • In addition, following our survey, the Vietnamese government made a surprise announcement that it will ban motorcycles from Hanoi by 2030. While this controversial plan is likely to be at least partially reversed, motorcycle sales in and around the capital will be negatively impacted in the meantime.

The FTCR Asean Auto Purchase survey is based on interviews with 5,000 consumers in Indonesia, Malaysia, the Philippines, Thailand and Vietnam.

FT Confidential Research is an independent research service from the Financial Times, providing in-depth analysis of and statistical insight into China and Southeast Asia. Our team of researchers in these key markets combine findings from our proprietary surveys with on-the-ground research to provide predictive analysis for investors.