The company’s data shows that Malaysia registered a new monthly sales record of around 68k, after sales were previously limited at under 60k. LMC Automotive adds its view that these extraordinary sales are temporary, reflecting hidden demand over the previous few months when buyers withheld their purchases on the speculation of car prices reducing, as promised by the government during the general election in April. It has since been clarified that the price reduction is to be gradual over several years.

LMC Automotive also reports high sales for Indonesia in July at around 104k. This was the second time that sales surpassed the 100k level, after sales in July 2012 reached 101k for the first time. The company says it anticipates that this increase is seasonal, however, and will not be sustained in the coming months, particularly given the higher bases in previous months this year.

It adds that there are downside risks in the economy that would likely affect total sales throughout the next several years. These risks include recent increases in the central bank’s policy interest rates, the IB rate, which were signalled by rising inflation; and the depreciation of the Rupiah, which will not only affect exports and, thus, income, but also production costs and car prices.

Moving to the Philippines, LMC reports that strong sales continued in July at almost 18k. Sales have been moving between 16-18k since February this year, compared to 15-17k in the previous year, reinforcing LMC's previous upward revision to sales of close to 200k this year.

Sales in Vietnam also continued strongly at around 9k, remaining on the path to recovery from pre‐2010 levels and marking the third consecutive month round this level. It is also notable that sales improved significantly in the MPV and SUV segments by almost 20% from the previous month, and 65% from the previous year. The Toyota Fortuner and the Innova held around half of the market share in the segment.

However, Thailand sales continued to fall sharply to around 94k, with sales falling below the 100k level for the first time in 14 months. LMC comments that the fall was deeper than it had previously expected, considering the sharp reduction in the Seasonally Adjusted Annualized Rate from 1.4 million in January to 1.1 million in July. This will impact the outlook for the next few years.

The company added: 'We anticipate that the market contraction in Thailand will impact OEMs’ strategies for the region. Share of Thailand in the region has shrunk to around a third from nearly a half last year. Monthly sales in Indonesia, in fact, surpassed those of Thailand for the first time in July, significantly affecting some OEMs, namely Toyota, Nissan and Mitsubishi. Some of these have seen sales in Indonesia overtake Thailand over the past few months. We expect this to be further magnified by the Low Cost Green Car program in Indonesia, which was recently introduced to help boost sales in the market.'