BANGKOK -- Sales of new cars in Southeast Asia's six major markets increased for a third straight year in 2018, rising 6% and breaking the previous record set in 2013.
Thailand marked a 20% jump in sales to 1.04 million units on the back of a robust economy. Automakers competed fiercely in the second-largest car market in the region to lure consumers with low-interest financing and other enticements.
In Indonesia, the region's top market, sales grew 7% to 1.15 million units. The total tally in the six nations, which include Malaysia, the Philippines, Vietnam and Singapore, came to a record 3.57 million units.
The robust growth in Southeast Asia comes as a breath of fresh air for automakers, which are seeing a slowdown in the world's top two markets, China and the U.S. But analysts expect Southeast Asian auto sales to slow down this year, as the effects of the U.S.-China trade war spill over to the region, which is heavily reliant on exports to China.
Industry groups in Indonesia, Thailand and Malaysia all project flat turnover in 2019. Domestic demand in the region is expected to suffer if exporter earnings were dragged down by a slowing Chinese economy.
Rising interest rates are also a major reason for the cautious outlook. In December, the Thai central bank raised its policy rate for the first time in seven years. A Toyota Motor sales staffer in Thailand projects stricter terms on loan interest rates and down payment.
Back in 2012 and 2013, sales in the region soared to around 3.5 million units, owing mainly to a Thai government program that encouraged new-car purchases. But Thai demand fell off after that, while growth stalled in Indonesia and Malaysia. The combined figure in the six markets sank to around 3.12 million units in 2015.
The subsequent sales recovery has been led by the Philippines and Vietnam, where population and income growth have spurred motorization. The two countries together comprise a market of 700,000 units -- bigger than third-ranked Malaysia.