Southeast Asia Fifth Largest Auto Market?

By Agence France-Presse Southeast Asia is set to become the world's fifth largest automobile market by 2005 but success hinges on implementation of the delayed ASEAN Free Trade Area (AFTA), an industry roundtable heard Nov. 11. The 10-member Association of Southeast Asian Nations slashed tariffs on most products in the region to below 5% in January, part of efforts to form a powerful trading bloc to counter China's overwhelming economic clout. "Under AFTA the dream will come true for global carmakers but only if AFTA is implemented," Kour Nam Tiang, director of PT Astra International, told more than 100 industry executives at the eighth Asia-Pacific Automotive Industry Roundtable. Southeast Asia's auto industry has recovered steadily since the financial crisis of 1997-1998 and in the first half of 2003 grew 13% compared to zero to 1% for the industry worldwide this year, Kour said. An integrated ASEAN is expected to see 1.6 million vehicle sales in 2005 and 2.3 million by 2010, while the majority of global growth in the auto market from 2004-2010 will be in Asia, mostly in ASEAN, China and India, Ford Motor Corp. CEO Bill Ford said last month. Auto industry analyst Daniel Mitchell also said the region's huge growth, particularly in Thailand, hinged on AFTA's implementation. "There must be a trading bloc with enough critical mass to be able to compete with China," Mitchell said. China's automobile market has been growing at more than 50% this year, he said, and global manufacturers are sinking hundreds of millions of dollars into the country to boost capacity and meet domestic demand. Chinese officials in October said the world's most rapidly expanding economy risks overheating and cautioned over potential financial strains, brought on in part by feverish investment in industries such as automobiles and steel. Copyright Agence France-Presse, 2003