Indonesia Seen Beating Thailand in Auto Sales

Indonesia is poised to overtake Thailand as Southeast Asia’s biggest car market for the first time since 2011 as the region’s most-populous nation delivers faster economic growth and greater political stability.

When comparing monthly automotive sales for the region’s two biggest markets starting from 2009. Indonesian sales will total about 1.2 million in 2014, versus 1 million in Thailand, said Tim Zimmerman, the Singapore-based president of Southeast Asia operations for General Motors Co., the world’s second-biggest carmaker. Vehicle sales in Indonesia rose 6.6 percent in the first half, while they slumped 40 percent in Thailand, according to data compiled by Bloomberg.

“Indonesia will obviously take the lead this year and it remains to be seen to which level the Thai market will recover,” Zimmerman said.

Sales have dropped in Thailand during the past year as anti-government protests that led to a coup on May 22 helped send the economy close to recession. Indonesia’s market is expanding, with consumer confidence at a 20-month high amid optimism President-elect Joko Widodo will boost growth in the nation of about 254 million people.

While average 2013 incomes in Indonesia of $9,559 were about 30 percent below those of Thailand in 2013, the 34 percent growth since 2008 in Indonesia was 12 percentage points faster. The country’s economy expanded 5.17 percent in the first half of 2014, versus 0.1 percent for Thailand.

Indonesia will also become a “major threat” to Thailand as the region’s car manufacturing hub because of the former country’s size and calmer politics, said Ong-arj Pongkijworasin, chairman of an association of Thai automakers. Auto output in Thailand dropped 29 percent in the first half, while production rose 15 percent in Indonesia.



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