SE Asian cars to fuel growth

SE Asian cars to fuel growth

HONG KONG (AFP): South Eastern Asian motor markets are expected to lead global growth over the next five years driven by increased volumes and greater vehicle variety, a leading global bank said Wednesday.

A report released by ING Barings said automobile manufacturers and industry experts predicted an average compound annual growth rate (CAGR) of 13.8 percent for the region's vehicle market over the next five years.

Over the same period, total vehicle volumes would more than double to 1.6 million.

Asia will be the largest contributor to global growth, contributing over 40 percent relative to other countries, the report said.

In particular, fewer vehicle numbers in the Association of South East Asian Nations (ASEAN) countries, coupled with rising income levels, would boost average CAGR to 4.2 percent over the period, the bank predicted.

However, the bank warned that political and economic uncertainties in the region could adversely affect forecasts.

In terms of economic growth, "while strong recovery rates are recorded, slowing domestic consumption and potential slowdown in US exports mean that growth rates may be difficult to sustain in the short term."

In addition, "political uncertainty currently prevailing in some ASEAN countries could hamper future growth prospects." the bank said.

However, the bank added it believed the region would be attractive for long term automotive manufacturers eager to capitalize on high potential growth prospects.

The report added that Japanese motor giant Toyota Motor Corporation would the region's biggest success due to its strong global presence and established brand name.