Malaysia overtakes Thailand as Southeast Asia's second-biggest auto market

By Minh Long   May 24, 2024 | 01:39 am PT
Malaysia, long in third place, has surpassed Thailand for three consecutive quarters through January-March, becoming Southeast Asia's second-largest auto market after Indonesia.

According to the Malaysian Automotive Association, auto sales reached 202,245 vehicles in the first quarter of this year, up 5% from the same period last year. This follows an 11% increase in 2023, setting a record of 799,731 vehicles sold.

A car model produced by Malaysian carmaker Proton. Photo courtesy of Proton

A car model produced by Malaysian carmaker Proton. Photo courtesy of Proton

Sales tax exemptions for domestically produced vehicles, part of the Malaysian government's economic stimulus package, boosted the national car brands Perodua and Proton, which hold about 60% of the market share, according to Nikkei Asia.

The tax exemptions began during the pandemic year of 2020. Although they ended in mid-2022, the fulfillment of tax-free bookings continued to boost sales figures in 2023, according to the association. "Many new model launches, including electric vehicles with very competitive prices, helped to spur sales," it said in a statement.

In contrast, sales in Thailand have been in a slump. The country, which had long held the second place, saw a 25% decline in sales in the first quarter compared to the previous year. Thailand's monthly auto sales have declined year-on-year since last June due to increasing nonperforming auto loans and stagnant consumption.

Indonesia is also experiencing low momentum. Auto sales in the first quarter fell 24% year-on-year as rising interest rates led consumers to hold back on purchases, according to the Nation.

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