Southeast Asian Automotive Market Positive in July; Driven by Malaysia, Indonesia, Vietnam
HANOI — The ASEAN automotive market showed clear signs of recovery in July 2026, following a period of significant volatility triggered by high interest rates and weakening purchasing power. Although growth rates vary between countries, recovery indicators are clearly emerging, including rising vehicle demand, increased production, and automotive manufacturers continuing to launch promotional programmes to sustain growth in the second half of the year.
According to data from the Malaysian Automotive Association (MAA) cited by Vietnam.vn, vehicle sales in the country reached 73,615 units in July. This figure rose eight per cent from the previous month and was five per cent higher than the same period in 2025. It was one of the most positive results since the start of the year, bringing cumulative sales for the first seven months to 458,968 vehicles, up three per cent compared with the same period in 2025.
According to the MAA, this growth stemmed from several factors. July had a sufficient number of working days, allowing car manufacturers to continue implementing various promotional programmes to stimulate demand. Meanwhile, the pick-up truck segment recorded an increase of around 30 per cent compared with the previous month thanks to the Budi Madani diesel fuel subsidy policy. On the production side, factories in Malaysia shipped 75,490 vehicles in July, up five per cent compared with 2025 and the highest level in around 30 months, indicating that businesses are more confident about market prospects.
Indonesia also showed signs of recovery after more than a year of slow growth. According to data from the Association of Indonesian Automotive Industries (GAIKINDO), cumulative car sales in the first seven months of this year rose around 18 per cent compared with the same period last year. This reflects improved demand thanks to a more stable interest rate environment and increased business investment.
However, analysts argue that the recovery in Indonesia is not entirely uniform. The main driver remains demand from businesses and commercial customers, while the purchasing power of middle-class households is still affected by cost-of-living pressures and real incomes. This suggests that ASEAN’s largest market is still in the process of recovery and has not yet entered a new strong growth cycle.
In Thailand, the automotive market in July remained mixed. After months of recovery thanks to stimulus programmes, domestic car sales continued their upward trend, reflecting a gradual improvement in consumer demand after a prolonged period of decline. However, the country regarded as Southeast Asia’s automotive factory still faces significant pressure in terms of production and exports. Purchasing power in many overseas markets has not fully recovered, while automotive manufacturers are still affected by high financing costs and increasingly intense competition from Chinese producers. Experts believe that Thailand’s current market recovery is cyclical, heavily dependent on government stimulus packages and support policies, rather than stemming from sustainable growth in consumer demand.
To create new momentum for the automotive industry, the Thai government is promoting various policies to encourage the transition to electric vehicles, including a plan to support the replacement of up to 80,000 old vehicles with electric vehicles, totalling around 24 billion baht (714 million US dollars). If implemented, this programme would not only stimulate consumption but also support manufacturers that have invested heavily in Thailand, especially Chinese companies such as BYD and Great Wall Motor.
In the overall regional picture, Vietnam continues to be one of the fastest-growing markets. According to data from the Vietnam Automobile Manufacturers Association (VAMA), total market sales in July reached 33,707 vehicles, up eight per cent from the previous month and up six per cent compared with the same period in 2025. In the same period, TC Group sold 3,543 Hyundai vehicles, while VinFast delivered 21,781 electric vehicles to domestic customers.
The Jaecoo J5 EV attracted attention thanks to its affordable price, attractive design, premium interior and fairly good performance. However, real-world experience shows that this electric sport utility vehicle (SUV) still has many areas that need improvement. More than 40 entrepreneurs from Nghe Tinh province living in Ho Chi Minh City recently conducted a survey of VinFast’s production ecosystem in Hai Phong, paving the way to connect with suppliers and seek opportunities to participate more deeply in the electric vehicle value chain.
Particularly in Vietnam, electric vehicles are no longer a niche segment but have become one of the main drivers of market growth, a phenomenon not yet seen in other major ASEAN markets. If current trends continue, Vietnam will not only be one of the fastest-growing markets in ASEAN but could also become a regional leader in the pace of transition towards electric transport within the next few years.