Thailand-Vietnam Automotive Industrial Trends & Analysis

The development of the automobile industry differs significantly among Southeast Asian Countries. Although many vehicle manufacturers in the Philippines, Malaysia, and Vietnam, Thai is still considered the most developed country in automobile manufacturing. In recent years, the sales volume of automobiles in Southeast Asia has presented an upward trend.

Thailand has been recognized as the center of the automobile manufacturing industry, supporting its domestic market and exports to the ASEAN region. However, Vietnam’s automobile market has been growing strong. Because of the economic improvements, Vietnam’s middle-class population has expanded. They have access to a quality of living and enjoy spending on expensive items, including cars.
The Malaysian Automotive Association (MAA) recently released the ASEAN sales stat for 2021 (January to November), and some figures are worth discussing here. During the first eleven months of 2021, combined total sales—2,461,119 units—from Indonesia, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam markets represent a 15% increase from the previous year—2,134,038 units.

While Indonesia topped the vehicle sales, Thailand is still the leader in vehicle production with 1,531,337 units, a 19% increase from 2020. Last but not least, Vietnam’s vehicle production was at 142,027 units, a 2% increase from the previous year, taking the fourth spot in production performance.

According to SCB’s report, Vietnam’s government incentivized domestic automobile manufacturers through policies that empower domestic manufacturers to compete with foreign ones. However, there is room to grow in Vietnam’s automotive market indicated by the relatively low car ownership. Thai entrepreneurs and investors may secure opportunities to export the auto-parts and finished vehicles to Vietnam’s domestic market.

To remark, car production in Thailand is expected to be 200,000 units by the end of this quarter, according to Thailand Automotive Institute. In the long-term, Thailand’s car production is projected to trend at around 250,000 units in 2023. As we may see, Thailand’s and Vietnam’s automotive markets will grow and co-exist, but many industrial partnership programs are yet to come.

Article by: Asst. Prof. Suwan Juntiwasarakij, Ph.D., Senior Editor and MEGA Tech