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New vehicle sales in the Asia-Pacific region, including passenger vehicles, trucks and buses, are forecast to increase by 4% to 43.9 million units in 2017, according to AsiaMotorBusiness.com based on data from 11 key markets in the region.

Sales in China have continued to rise this year despite a sales tax increase on small cars at the beginning of the year. Economic growth in the country has remained strong, driven by strong manufacturing, consumer spending and investment growth. We expect the vehicle market to grow by just under 4% this year, but a further tax increase next year is expected to slow overall demand.

After strong growth in 2016, the Indian vehicle market has expanded at a slower rate so far this year, reflecting more moderate economic growth and the disruption to the economy caused by demonetisation. Full-year sales are expected to be 4% higher, helped by falling interest rates and buoyant consumer sentiment.

Vehicle sales  and forecasts* in Asia, 2014-19

* 2014-16 data are actual, 2017-19 are forecasts. Data: Industry Sources; Asia Motor Business forecasts.

Sales in Japan have rebounded strongly this year, helped by higher than expected economic growth in the country and buoyant consumer sentiment. Full-year sales are expected rise by over 6% to 5.275 million units, with more moderate growth expected next year.

Vehicle sales in South Korea have remained at near record levels so far this year, with market sentiment seemingly unaffected by military activity across the border and by high levels of consumer debt. Interest rates remain at historically-low levels, underpinning domestic consumption.

South-east Asia’s largest vehicle market, Indonesia, continues to enjoy a moderate recovery - driven by new models and falling interest rates. The market is expected to move slowly higher in the next few years, reflecting moderate economic growth in the country.

The Thai vehicle market finally looks to be recovering after four years of sharp declines, with sales forecast to rise by over 7% this year. Full-year sales in Malaysia are expected to increase slightly this year after falling by 13% in 2016, as the economy recovers from last year’s slowdown.

Strong economic growth and low interest rates continue to drive the Philippine market higher, with sales forecast to rise by over 7% this year, while the Vietnamese market has struggled to make further progress this year after four years of strong growth.

Asia Motor Business expects vehicle sales in the region to drift slightly lower in 2018, mainly due to lower forecast sales in China as market stimulus continues to be removed. But this outcome is far from certain. Japan and most markets in South-east Asia are expected to continue to perform positively, while further moderate declines are expected in South Korea and Taiwan.

Tony Pugliese

September 2017

Asia Motor Business is an Asia-based automotive industry research and consulting company supported by a network of experienced industry analysts located across the region. The company provides research, analysis, forecasts and consulting services on the world’s emerging and developing automotive markets.

Asia-Pacific vehicle sales grow 4 % in 2017

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