Automobile Industry Association: "Korean Brands Expanding Market Share in ASEAN Sales"

[Asia Economy Reporter Kiho Sung] Recent research shows that while South Korean and Chinese brands are experiencing growth in the ASEAN automotive market, Japanese brands are showing a decline.

The Korea Automobile Manufacturers Association (KAMA) announced on the 22nd that according to their survey of the ASEAN automotive market, which is sized at 3.5 million units (based on 2019), the market share of Korean brands increased by 1.3 percentage points from 2015 to 2019. In contrast, Japanese brands decreased by 1.5 percentage points, and Chinese brands increased by 1.0 percentage point, indicating a gradual expansion of Korean companies' market share in ASEAN.

According to KAMA, the domestic market sizes by ASEAN country are Indonesia (1.03 million units), Thailand (1.01 million units), and Malaysia (600,000 units), which together account for approximately 76% of total sales. By brand, Korean companies are expanding their market share mainly in Vietnam, Japanese companies hold high shares in Thailand and Indonesia, and Chinese companies are slightly increasing their share across the entire ASEAN market.

Meanwhile, the production ratio within ASEAN also changed: Korean brands increased local production by 2.8 percentage points from 2015 to 2019, Japanese brands decreased by 2.6 percentage points, and Chinese brands slightly increased by 1.3 percentage points.

However, despite the slight increase in production share by Korean companies, out of 115 automotive production plants (including assembly plants) in ASEAN, only 7 plants (6.1%) belong to Korean companies, whereas Japanese companies operate about 64 plants (55.7%), representing the majority. Regarding automotive parts, Korean companies account for only 39 firms across ASEAN, while Japanese companies have more than 2,100 firms operating locally in Thailand alone, indicating that Korean companies’ production base remains underdeveloped.

KAMA stated that for Korean companies to continuously expand sales, they must improve the localization rate of parts?which is currently inferior to Japanese brands?establish local production bases, and systematically organize distribution and after-sales service networks to secure competitiveness against Japanese and Chinese brands. They also emphasized that pioneering the niche market for electric vehicles is crucial, including producing affordable electric vehicles, collaborating with vehicle-sharing service providers, and participating in ASEAN government procurement markets to open new sales channels.

At the government level, support is needed to expand the adoption of Korean electric vehicles, such as negotiating to widen the tax benefit gap between local hybrid and electric vehicles, pursuing free trade agreements (FTAs) with countries imposing high tariffs (such as Thailand and Malaysia), and providing information support to local parts suppliers.

Jung Manki, Chairman of KAMA, said, “The ASEAN market is not easy to access due to high tariffs and various non-tariff barriers, and competition with Japanese and Chinese brands is intensifying, so differentiated strategies are necessary.” He added, “Our government should actively pursue tariff reduction negotiations on finished vehicles and parts, expand financial and informational support for local parts suppliers, and resolve difficulties faced by companies entering the market through communication with local governments.”

This content was produced with the assistance of AI translation services.