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Green policies stir ASEAN eco-car market
(JP/R
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(JP/R. Berto Wedhatama) (JP/R. Berto Wedhatama)
(JP/R. Berto Wedhatama)
The divergent green car policies found across ASEAN have created unique combinations of 'push' and 'pull' marketing, dramatically impacting demand patterns and opportunities for future growth, an analyst said recently.
Frost & Sullivan Asia Pacific automotive practice associate director Dushyant Sinha said recently as quoted by The Nation that the three biggest auto countries in Southeast Asia ' Thailand, Malaysia and Indonesia ' all have low emission, high mileage vehicles, but their policy approaches and focuses are significantly different.
Thailand's eco-cars policies have stringent product and investment requirements, while Malaysia's regulations cover the widest possible range of segments and vehicles.
Thailand provides a bouquet of incentives across income tax, excise duty and import duty, while Malaysia customises its offerings based on how strategic the investment is.
In Indonesia, the government's initiative for the production of low cost green cars (LCGCs) has driven major carmakers to launch environmentally friendly cars. Toyota Agya, Daihatsu Ayla, Suzuki Karimun R and Honda Brio Satya have answered the increasing demand for LCGCs. Since being launched in September 2013, LCGCs have gained popularity. There are around 10,000 to 15,000 LCGCs sold throughout the archipelago every month.
The growing competition in Indonesia's LCGC market is expected to drive down price. The challenge for the country's flourishing market lies in its lack of local sources for raw materials, which serve as an essential factor of driving down operational costs, according to Ipsos Business Consulting Indonesia.
The developments in the green car space are not limited to the aforementioned three countries. Three other Asian countries boasting local manufacturing ' Vietnam, the Philippines and China ' are also toying with various policy initiatives and roadmaps to boost investment.
In the Philippines, the hybrid incentive bill is on the verge of becoming law and is expected to further support existing grassroots initiatives such as the e-jeepney.
In China, not only has the government issued stringent emission regulations that have prompted the creation of more green cars, but the country's diversification of power sources ensuring environmental sustainability has also helped support the industry.
To prompt car manufacturers to diversify their power sources, the Chinese government subsidizes the sales of electric vehicles and plug-in hybrids. The government aims at having five million green cars on the road by 2020. Currently, German carmaker BMW is planning to launch an electric car in mainland China in September.
Thailand's limited market necessitates a strong 'push' strategy with government support such as the first-car buyer policy, while Indonesia's large and growing customer base and low motorization have created a natural growth engine to drive forward its LCGC agenda.
It is the strong policy 'push' that has given Thailand a significant lead over Indonesia and Malaysia in the green car space. However, its sustainability will be a key challenge over the next decade.
Thailand has been a pioneer in the green car space in the region. Its eco car program, launched in 2007, is the bedrock of the government's green car policy. So much so that green cars are virtually synonymous with eco cars in Thailand, although the former also includes hybrids and other alternate fuel vehicles.
Eco cars have changed demand patterns in a market dominated by pickup trucks. Close to 180,000 eco cars were sold last year, representing a penetration of about 27 percent, making green cars the fastest growing segment in the last four years. (JP)
