In its latest report for the ASEAN region, LMCA said the floods in Jakarta appear to have affected vehicle sales, but this is likely to be a short‐term factor.

It added that a medium‐term effect will come from the mini currency crisis currently under way in the country as the rupiah has plunged to its lowest level (against the US$) since the 1997/98 Asian Financial Crisis. This has led to a rise in the cost of importing both CBUs as well as automotive components for locally‐assembled vehicles.

Economic growth in 2015 was curtailed as a result of weak exports, particularly of oil and gas, which will have a knock‐on effect on job and income growth. In turn, domestic demand contracted due to high inflation and interest rates.

Steeper vehicle prices, high interest rates and inflation have all negatively impacted LCV demand in Indonesia.

Longer term, the Indonesian government plans to improve the country’s infrastructure; notably, at its deep‐sea ports. This will help to bring down logistics costs and stimulate economic growth via private investment, especially in the automotive industry.

Thailand, the second largest ASEAN market, saw a drop in sales of 11% in February this year when compared to the same month last year. Our forecast for 2015 stands at 820,000 units.

High household debt in Thailand of 85% of GDP has slowed down demand for LCVs. Financial companies have put in place stricter measures for the approval of leasing contracts making it increasingly harder for consumers to secure deals.

The Bangkok Motor Show in late March/early April is one of the key sales indicators for the Thai market. This year, sales failed to reach the set targets and fell below the levels seen at last year’s event.

Target sales at the Bangkok Motor Show 2015 = 40,000 units. Actual sales at the Bangkok Motor Show 2015 = 37,027 units. Actual sales at the Bangkok Motor Show 2014 = 39,415 units.

In Malaysia, vehicle purchase prices dropped by 1% to 3% in the wake of the new tax scheme. A point of concern remains that other goods and services may increase as a result of the revised tax structure, which could negatively affect consumers’ purchasing power.

Growth was expected in both Vietnam and the Philippines this year. However, demand has tended to be for CBUs rather than locally produced models, LMCA concluded.