The automotive industry in the Association of Southeast Asian Nations (ASEAN) is experiencing significant transformations, driven by evolving market dynamics, technological advancements, and shifting consumer preferences. Here's an updated overview:
In 2023, the ASEAN vehicle market ranked as the fifth-largest sub-regional market globally, with total sales reaching approximately 3.3 million units. The passenger cars market in ASEAN is projected to generate revenues of around US$68.3 billion by 2025.
Indonesia: Leading the region, Indonesia recorded over 784,000 motor vehicle sales from January to September 2024, underscoring its position as the largest automotive market in Southeast Asia.
Thailand: Thailand remains a pivotal player, and The Federation of Thai Industries forecasts vehicle production to reach 1.5 million units in 2025, with a significant portion designated for export.
The ASEAN region is witnessing a surge in electric vehicle adoption. In 2024, Thailand emerged as Southeast Asia's largest EV market, registering 70,000 new EVs. Projections for 2025 indicate a 40% increase in EV sales, surpassing 100,000 units.
Investment in EV Production: Global automotive manufacturers are investing heavily in ASEAN's EV sector. For instance, Mazda Motor Corp plans to invest $150 million to produce electric compact SUVs in Thailand, aiming for an annual production capacity of 100,000 units.
Economic Contribution: In 2023, the manufacturing sector in ASEAN experienced a value-added growth rate of approximately 1.26%, reflecting the region's resilience amidst global economic challenges. The manufacturing market in ASEAN is anticipated to grow by 2.36% between 2025 and 2029, underscoring the region's expanding industrial capabilities.
Intra-ASEAN Investments: In 2022, intra-ASEAN trade accounted for 22.3% of the region's total trade, highlighting the strengthening economic ties among member nations.
Foreign Direct Investment (FDI): The region continues to attract substantial FDI, particularly in the manufacturing sector, due to its strategic location, competitive labor costs, and supportive government policies.
Analyses by the McKinsey Global Institute suggest that with full implementation of the ASEAN Economic Community's integration strategies and by capturing a larger share of global manufacturing, the region could realise an additional $280–$625 billion in annual GDP by 2030.
Southeast Asia is experiencing a significant surge in infrastructure development, driven by rapid urbanisation, economic growth, and technological advancements.
Indonesia: In 2025, Indonesia's government has proposed a budget of approximately 3,613.1 trillion rupiah (around $230 billion), reflecting a nearly 6% increase from 2024. A substantial portion of this budget is earmarked for infrastructure projects, including the development of the new capital city and enhancements in transportation and energy sectors.
Malaysia: Malaysia is positioning itself as a hub for energy and semiconductor manufacturing. The government is focusing on infrastructure projects that support these sectors, including investments in renewable energy facilities and advanced manufacturing plants.
Philippines: The Philippines continues to prioritise infrastructure development, with significant investments in transportation, communications, and social infrastructure. The government's "Build, Build, Build" programme aims to modernise the country's infrastructure landscape, enhancing connectivity and supporting economic growth.
Thailand: Thailand's PTT Exploration & Production (PTTEP) has announced plans to invest $5.3 billion in 2025 to enhance core assets and expedite development projects, particularly in the energy sector. This investment is part of a broader strategy to support the transition to cleaner energy and bolster the country's infrastructure.
Vietnam: Vietnam is focusing on expanding its infrastructure to support its rapidly growing economy. Key areas of investment include transportation networks, manufacturing facilities, and energy projects, aiming to enhance connectivity and industrial capacity.
Regional Outlook - Digital Infrastructure: As ASEAN's digital economy is projected to reach $330 billion by 2025, countries are investing heavily in digital infrastructure, including 5G technology, data centers, and digital platforms. These investments are crucial for supporting sectors such as e-commerce, fintech, and artificial intelligence.
(sources: Thailand’s PTTEP Plans Investment to Boost Core Assets, Spur Development Projects – The Wall Street Journal | Malaysia aiming to become energy, chip making hub – Reuters | ASEAN Automotive Federation – November 2024 | Passenger Cars, ASEAN – Statista 2024 | Indonesia’s New Capital May Be Spared From Prabowo’s Budget Cuts – Bloomberg News)
