Market forecasters predict that the U.S. and China will lead the global car market growth this year.
However, the emerging or sluggish markets are also important for retaining global market share.
Last year the global car demand was led by China with 1.913 million units, followed by the U.S. 1.65 million units, the EU 1.458 million units, forming the major trio, while Brazil registering 3.3 million, India 2.53 million, and Russia 2.48 million units, respectively.
Global car makers will compete fiercely at those five major markets, except for Russia in recession, this year.
There surely is another important mega market, ASEAN, however. The region's total demand stood at around 3.5 million units, twice the Korean market, even though each member has less than 1 million mark.
In the ASEAN market Japanese auto makers like Toyota, Honda, Nissan, Isuzu, etc. are dominating more than 80%, while Korean makers register less than 2% market share.
Hyundai, Kia, GM Korea, Renault Samsung, and Ssangyong exported 76.751 units last year to the market.
Of the total exports, shipment to the Philippines was 20,841 units, while Vietnam 12,872 units, Malaysia 12,285 units, Laos 7,803 units, Indonesia 7,624 units, Singapore 6,099 units, Brunai 4,796 units, Thailand 2,303 units, Myanmar 2,118 units, etc.
By maker, Hyundai-Kia exported around 60 thousand units, while Ssangyong and Renault Samsung exported 1,136 units and 10,000 units, respectively.
Renault Samsung expects that their sales in Malaysia will increase in the coming years as Renault is assembling CKD kits of SM3 in collaboration with a local assembler.
General Motors has an assembly plant with a production capacity of 180 thousand units and also an engine plant in Layong, Thailand, but their sales receded to 30,000 units level last year.
The center economy in the ASEAN is Thailand. Thailand's new vehicle sales registered 1.88 units last year, of which 800 thousand are for local market, while the remaining 1.1 million for exports.
Local market size is bigger for Indonesia with 1.2 million unit demand. Thailand's yearly demand was 1.3 million units since 2002, but the economic slowdown and termination of tax incentives last year resulted 32% drop in sales.
On 3rd February, TAIA President Thanawat Koomsin visited Korea accompanying Thai government officials and industry representatives in order to understand the growth history of Korean automotive industry, and said "ASEAN is the only market in the world that shows a growth rate of 6% per annum, and in order to penetrate the market Japanese makers account for around 80% of new car demand it is imperative to construct a local plant."
Thailand is geometrically the center of ASEAN and the infrastructure and well-established auto cluster are convenient for export to neighboring countries, such as Indonesia, Malaysia, Singapore, etc.
Furthermore, the emission standard in Thailand is EURO 4, shifting to EURO 5, and so export to the neighboring EURO 2 or EURO 3 countries like Indonesia and Malaysia is more viable than vice versa.
If the plant is in Indonesia, for example, export to the EURO 4 or EURO 5 countries will be more difficult.
The President Koomsin explained that "The reason why Japanese cars are so much popular in the ASEAN countries is that Japan had invested at the earliest stage of industrialization, and expanded their networking in the filed of sales, maintenance, second-hand market, finance, etc.
He emphasized that " Thai consumers are putting more on quality rather than low prices."
So to speak, Thai consumers buy new cars on 4~5 year installments, and a bit of financial burden does not matter as they do not hope to sacrifice quality for lower price.
He views that "Hyundai and Kia cars are advancing than the U.S. cars in terms of price-to-value ratio, and so if Korean car makers set up the production bases in Thailand, they will have good opportunities for success."
And then "Thai government is offering 10% excise tax cut for Hybrid or EVs, and so Toyota Prius or Camry Hybrid are selling well. German premium cars are also enjoying good sales with an annual sales of around 90 thousand units, showing big potential for the sales growth of the segment."
He added that Honda had given to the consumers the belief that their cars are of the image of U.S. cars rather than Japanese cars.
President Koomsin visited Hyundai Asan plant and KAMA during his stay in Seoul.
TAIA is an association representing 157 members, comprising 17 OEMs, 7 two-wheelers, and 133 suppliers.