The automotive industry in Asia continues to grow, especially from Asia’s biggest markets in Indonesia and Thailand. Asia automotive has Japanese OEMs that dominate the industry since it has well established chains of local supply across its region.
As a foreign investor who wants to invest in the automotive industry, market understanding that is a strong and powerful Asia investment strategy is required. The Asian countries are offering vast investment opportunities for both automotive manufacturers and automotive component distributors.
Countries in Asia Where You Can Invest in Asia Automotive
The production and manufacturing of automotive in Asia has skyrocketed especially in Thailand, Malaysia, Indonesia, and Vietnam. Consider those countries when you are planning to invest in the automotive sector in Asia.
This country is known as Asia’s Detroit. Thailand is known as ASEAN primary automotive manufacturer. This country also gained the traction especially in the export industry of automotive. In 2018, Thailand produced about 2 million units of automotive products.
Also, in the same year, the country exported over half of the products to over 100 countries. In 2018, the year on year growth of the automotive industry in Thailand was 8.7%. Domestically, Thailand sold more than 1 million units of its automotive product.
Thailand also has a stimulus package that is known as Thailand Plus which is designed for the foreign investors who are interested to enter the automotive industry in Thailand. This package is offering 200% tax deductions to the investors who engaged in the automotive sector.
Unlike Thailand, Indonesia benefits not from the automotive exports but from the big domestic automotive market that is driven by the emerging middle class. Most purchases happen in big cities in Indonesia such as Jakarta.
At the end of 2018, the car sales in Indonesia grew with Asia growth strategy by 6% at more than 1.3 million automotive units sold in the country and 346.000 units were exported to foreign markets including Saudi Arabia, Vietnam, and Philippines.
Indonesia also has LCGC or Low Cost Green Car that found economic success especially in the domestic market. This special car is relatively affordable with the price 100 million Rupiah or 8,265 USD. The production of this LCGC is regulated by Indonesian government.
The growing progress of Vietnam’s automotive industry started in 2000’s. Based on the data of the automotive manufacturers association in Vietnam, more than 288,000 automotive products were sold in 2018. It increased by 6% from 2017. The growth is expected to increase every year.
The automotive industry of Vietnam is now relying heavily especially on the exports of automotive parts to the neighboring countries. In 2018, Vietnam earned 900 million USD trade surplus from the exports worth 4.4 billion USD. Consider this country when you think about Asia investment.
Asia automotive is growing rapidly in many other countries. Although many countries are offering tempting opportunities, the 3 countries above are the most recommended ones to invest in. Before you expand your own business to Asian countries, determine the strategy that will lead you to success.