Southeast Asia is fast becoming one of the most dynamic and industrialised regions in the world.Contributing to this rapid pace in development is a growing car market driven by an increase in demand for automobiles.
For the past few years Malaysia’s automotive sector has proven itself to be one of Malaysia’s key industries. Figures from last year reveal that the sector played a significant role in the country’s economy, contributing 4.2 percent to the country’s total gross domestic product (GDP). On its own, the automotive sector continues to improve, demonstrating growth in many segments within the sector.
United States (US) President Donald Trump fulfilled one of his election promises by getting rid of the North American Free Trade Agreement (NAFTA) and replaced it with the US-Mexico-Canada Agreement (USMCA) signed on 30 September.
There are many sectors within ASEAN that have propelled the region to greater heights in terms of economic development and general prosperity. One of the sectors that Southeast Asia takes great pride in is its automotive industry, which has seen an increase in interest from investors, specifically from the Asian giant that is China.Based on a report by Frost & Sullivan, no ASEAN country is in the Top 10 for global automotive sales as of Q1 2018.
With a relentless implementation of new technologies combined with a surge in investment deals, it is not erroneous to say that the automotive industry in Southeast Asia is experiencing a positive transition. Before the proposed introduction of Vietnam’s VinFast, Malaysia was the only Southeast Asian nation that had its own national car, in the form of Proton.
Norway, Germany, France and the United Kingdom (UK) have already announced an end date for the sale of gasoline and diesel cars. Norway has set its deadline as 2025 earliest, Germany and India in 2030 while France and the UK are planning to end the sale of gasoline and diesel cars in 2040. Meanwhile, other countries are also mulling doing the same thing.
Last September, Vietnamese Prime Minister Nguyen Xuan Phuc launched the construction of Vingroup’s automobile manufacturing complex in the northern port city of Hai Phong. The automobile manufacturing complex will be the production centre of Vietnam’s first national car, Vinfast. Bloomberg reported in September 2017 that conglomerate Vingroup plans to invest up to US$3.5 billion to build a manufacturing and research and development complex.