The ASEAN light vehicle (LV) market increased by 1% YoY in May, marking the fourth consecutive month of growth. On a country basis, Indonesia was the only market that suffered a sales decline during the month, dropping by 14% YoY.
Furthermore, recent information indicates that Indonesia’s performance in June continued to fall, decreasing by 23% YoY. This resulted in an overall 8% drop for H1 2025 as a whole compared to the same period last year. The poor performance was primarily due to overall weak purchasing power and tightened auto loan approvals. Additionally, the pull-ahead effect from the temporary tax cut that occurred between Q1 2021 and Q3 2022 has likely hindered volumes since 2023.
Although May and June sales experienced double-digit declines, we have marginally increased Indonesia’s 2025 sales forecast to 749k units in this report, as volumes in June were slightly stronger than our expectations. Consumers may be holding off on purchases in anticipation of the upcoming GAIKINDO Indonesia International Auto Show (GIIAS) from July 24 to August 3, which will feature new model launches and aggressive sales campaigns. However, our scenario remains unchanged: 2025 sales are expected to continue declining for the third consecutive year due to a challenging economic situation.
In Malaysia, registration data indicated that LV sales dropped by 8% YoY in H1 2025, primarily due to a sluggish result in January (-24% YoY). However, since then the market has gradually improved. Despite the YoY slowdown, H1 totals can still be considered a strong result, given that the market hit a new record high for three consecutive years at 711k units in 2022, 792k units in 2023, and 817k units in 2024. The outlook for Malaysia remains unchanged from our previous report, with a drop of 4% YoY to 789k units projected in 2025. However, consumers may rush to buy in Q4 2025 to avoid price hikes in 2026. It is worth noting that the government is set to change the tax calculation methodology, referred to as Open Market Value (OMV), which will increase the prices of locally produced models. Initially, OMV was scheduled for implementation in January 2025 but has been postponed to January 2026. We will monitor this development closely. If the government announces the implementation of OMV in January 2026, demand is likely to be pulled ahead to Q4 2025.
For Thailand, May sales recorded a notable rebound, driven primarily by strong demand for BEVs. This surge can be attributed to the competitive pricing strategies employed by Chinese automakers, making their offerings increasingly appealing to consumers. Conversely, the sales of Pickup Trucks have continued to experience a significant decline. While May’s performance was encouraging, volumes for the January-May period as a whole remained in negative territory, with an overall contraction of 4% YoY. This decline was marked by a modest 1% increase in PV sales, contrasted with a significant 15% drop in LCVs. Given the unexpectedly robust PV sales in May, we have revised our projections for the year and now anticipate that the Thai market will reach 571k units in 2025, indicating a slight increase of 0.9% compared to 2024.
