In February 2025, ASEAN Light Vehicle (LV) sales increased by 8% year-on-year (YoY) after the market had been in decline since August 2023, except for a marginal increase of 0.3% YoY in November 2024. By country, Thailand was the only market that experienced a negative sales performance in February, with a drop of 14% YoY marking its 21st consecutive month of contraction. Moreover, the country’s volumes continued to fall by 1% YoY in March. The sluggish performance was primarily due to high household debt, tightened auto loan approvals, and a weak economy.
In order to support the local industry, the Thai government increased the auto loan guarantee for Pickup starting in April until December 2025. The policy aims to relax auto loan approvals and focuses solely on Pickups, as this segment accounted for 47% of the country’s LV sales in 2022 but dropped to 29% in 2024, with all Pickup models produced locally. However, the policy is not likely to have a significant impact on demand, as it does not lower Pickup prices or the cost of ownership. Despite Thailand’s March sales being stronger than our expectations, we have lowered the country’s 2025 outlook from 593k units to 578k units, due to the limited impact of the government’s policy and the uncertain economy, particularly regarding goods exports.
In Indonesia, the LV market slowed by 11% YoY in January, then rebounded by 4% YoY and 18% month-on-month (MoM) in February, thanks to the 2025 Indonesia International Motor Show event held from February 13-23. However, based on recent information, sales in March once again decreased by 3% YoY and 1% MoM. This resulted in total Q1 2025 LV sales dropping by around 4% YoY, due to tightened auto loan conditions remaining an obstacle for new LV sales and the government increasing VAT from 11% to 12% in January 2025.
As such, we have lowered Indonesia’s 2025-29 sales forecast by an average of 4% compared to our previous report. The downward revision is based on the Indonesian government passing legislation that expands the role of military forces and reverses some of the restrictions implemented two decades ago after the Suharto dictatorship, which will impact consumer and business confidence. As a result, the country’s 2025 sales are now projected at 816k units. However, this projection does not reflect the March results, due to the timing of information, and thus the 2025 outlook could be lower than the 800k unit mark.
Malaysia’s LV volumes increased by 1% YoY in February, while registration data showed an expansion of 2% YoY in March. This came courtesy of aggressive sales campaigns during the Ramadan period and the launch of new models, particularly from Chinese brands such as the Jaecoo J7 and the BYD Sealion 7 and M6. Despite March sales being stronger than our expectations, we have marginally cut the 2025 outlook from 761k units to 759k units, as the upgrades and new models expected from national brands, Proton and Perodua, have been delayed.
