SINIR 2014-121 ASEAN and India Industry Monitor · The manufacturing and assembly sectors (automobiles and electronics) and materials sectors (textiles, cement and steel) continued

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Industry Report

ASEAN / INDIA INDUSTRY

MONITOR

2015 First Half Issue

Bank of Tokyo-Mitsubishi UFJ A member of MUFG, a global financial group

APRIL 1, 2015

【Summary】

� The business environment will continue to rebound gradually on the back of steady foreign demand and robust domestic demand.

� The business environment of major industries in ASEAN and India has been slowly recovering, thanks to steady foreign demand from developed countries as well as firm domestic consumption in line with the improvement of income level.

� ASEAN countries have remained strong as a whole. Although Malaysia and Indonesia’s resource exports have slowed, healthy consumer expenditure has improved the economy slightly. The Philippine economy has been firm as exports have expanded greatly, while the recovery of the Thai economy has also been progressing as the military government executes its economic policies. However, the Singapore economy slowed slightly due to sluggish exports. India also improved gradually amid higher consumer confidence due to the establishment of new government as well as stabilized inflation.

� The manufacturing and assembly sectors (automobiles and electronics) and materials sectors (textiles, cement and steel) continued to do well, supported by steady export demand and firm domestic consumption. In the automobile industry, sales volume expanded tremendously in Philippines and Vietnam, while other countries also experienced solid growth as a whole, except in Thailand where demand continued to remain sluggish due to political turmoil. On the other hand, electronic exports in Singapore continued to perform poorly as the export share of products related to smartphones and tablets, for which demand has been growing recently, is low.

� Although the non-manufacturing sectors (retail, travel, construction and real estate) achieved solid growth overall, the retail industry in Singapore and Thailand were negatively affected by reduced tourist arrivals mainly from China.

� Going forward, the business environment in ASEAN and India is likely to continue to rebound gradually. Exports are expected to be solid mainly due to the gradual recovery of the economies in developed country such as the US. Domestic consumption will continue to be robust, thanks to stabilized inflation and lowered interest rate driven by low commodity prices. Lower interest rates in India and Indonesia are expected to lead to increased capital investment, which will also boost economic growth.

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Table of Contents

Country Industry Indicator Latest Data Page

Singapore

Electronics 1. Electronics Exports Jan 2015 3

Retail 2. Department Store Retail Sales Index Dec 2014

Travel 3. Standard Room Average Occupancy Rate & Visitor Arrivals

Dec 2014 4

Office Property 4. Office Vacancy Rate & Rental Index Q4 2014

Construction 5. Construction Contracts Awarded Dec 2014 5

Malaysia Automobile 6. Automobile Sales Jan 2015

Office Property 7. KL Office Vacancy Rate & Rental Index Q4 2014 6

Thailand

Automobile 8. Automobile Sales Dec 2014

Textile 9. Shipment Index of Textile Products Dec 2014 7

Cement 10. Cement Production Dec 2014

Retail 11. Retail Sales Index Nov 2014 8

Office Property 12. Bangkok Office Vacancy Rate & Rental Index Q4 2014

Indonesia

Automobile 13. Automobile Sales Jan 2015 9

Motorcycle 14. Motorcycle Sales Jan 2015

Textile 15. Garment, Thread & Textile Exports Nov 2014 10

Office Property 16. Jakarta Office Vacancy Rate & Rental Index Q4 2014

Philippines Automobile 17. Automobile Sales Jan 2015

11 Office Property 18. Manila Office Vacancy Rate & Rental Index Q4 2015

Vietnam

Electronics 19. Computer & Electronics Components Exports Jan 2015 12

Automobile 20. Automobile Sales Jan 2015

Textile 21. Textile Exports Jan 2015 13

India

Steel 22. Crude Steel Production Jan 2015

Automobile 23. Automobile Sales Jan 2015 14

Motorcycle 24. Motorcycle Sales Jan 2015

Appendix Major Economics & Industrial Index (Real GDP Growth, etc.) 15

Note: The “FORECAST” period added in this edition is a short-term outlook (about 6 months to 1 year). This bulletin is issued semi-annually.

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1. Singapore / Electronics Exports Forecast: Slow Recovery Expected

（Source：International Enterprise）

� Singapore’s electronics export value decreased by -5.4% YoY in the second half of 2014.

� Although the demand from developed countries for communication devices such as tablets and smartphones has been increasing, electronics exports remained sluggish as semiconductors and PC components make up about 70% of Singapore’s exports.

� Exports of integrated circuits, a major product, decreased by -0.2% YoY, while exports of hard disk drives decreased by -18.2% YoY. PCs and their components also decreased by -7.2% YoY.

� The demand for finished products and electronic components is expected to expand slowly over the next one year as demand for PCs in the USA and Europe recovers. Hence, it is likely that the export value of electronic products from Singapore will also increase. However, the degree of recovery is limited as smartphone components are a small percentage of exports, thus restricting the benefits from the burgeoning smartphone market.

2. Singapore / Department Store Retail Sales Index

Forecast : Steady Sales Likely to Continue

（Source：Department of Statistics）

� The average YoY growth rate of Singapore’s monthly department store sales index slowed down to 2.2% in H2 2014, compared to 3.7% in H2 2013.

� This is partly attributable to continuation of tourist arrival decline for the country during H2 2014 (-3.3% YoY), following the disappearance of Malaysia Airlines MH370 in Mar 2014, which impacted tourist in-flow from China.

� At the same time, appreciation of the Singapore dollar against Indonesia Rupiah in 2014 eroded Singapore’s appeal to Indonesian tourists, which is another major visitor source and spending group.

� Amid current tightening of foreign labour in-flow by the Singapore government, it is anticipated to support employment rate among domestic residents, rendering this consumer group the main support pillar of retail spending in the country going forward.

� Should the impact of MH370 disappearance slowly abate, tourist visitations to Singapore should increase in 2015. Such development is expected to help Singapore department store sales to grow modestly over the next one year.

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Electronics Export Value(LHS)

(SGD Billion)

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YoY (RHS)

Department Store Sales Index(LHS)

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3. Singapore / Standard Room Average Occupancy Rate & Visitor Arrivals

Forecast: Occupancy Rate and Average Room Rate Expected to Weaken

（Source：Singapore Tourism Board）

� Singapore’s room occupancy rates and average room rates have held up relatively well in 2014 at 85.5% and SGD258 respectively despite the decline in visitor arrivals.

� Total visitor arrivals to Singapore fell -3.1% YoY to 15.1 million in 2014, the first drop since 2009, largely due to the decline in the number of tourists from China and Indonesia following a few airlines crisis in the region and depreciation of Indonesian rupiah during the year.

� Occupancy rates and average room rates are likely to weaken slightly over the next one year.

� Visitor arrivals are forecasted to pick up slightly due to the resurgence in Chinese and Indonesian demand, amid lower oil prices. Singapore continues to appeal as an attractive destination with a number of flagship events expected to bring more business visitors. The country will also attract tourists with its 50

th

independence ceremony. � However, the expected rise in visitor arrivals

will not be able to offset the higher room supply, which is estimated to peak in 2015 (about 3,500 rooms of supply, which is about 1.8 times compared to the previous year).

4. Singapore / Office Vacancy Rate & Rental Index

Forecast: Office Rentals Will Increase Slightly

（Source：Urban Redevelopment Authority）

� Office rents in the Central Business District (CBD) in Singapore have continued to grow in Q4 2014, with a sustained increase of 2.0% QoQ.

� For the Grade A office supply, CapitaGreen was completed in Q4 2014, while completion of the South Beach project has been postponed to 2015.

� The demand for office space has remained firm due to the sustained demand from non-financial firms (such as consumer goods, IT and social media industries) as well as financial institutions from Asia Pacific. The office vacancy rate of Q4 2014 stood at 9.9%.

� Office rents are likely to increase slightly over the next one year, mostly driven by the very low supply in CBD until 2016. In addition, the demand from non-financial firms is expected to remain healthy and it is highly likely that the office market vacancy rate in the CBD will improve.

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Standard Room Occupancy Rate (RHS)

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Vacancy Rate (RHS)

Rental(LHS)

（1990＝100）

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5. Singapore / Construction Contracts Awarded Forecast: Gradual Downward Trend Expected

（Source：Urban Redevelopment Authority）

� In 2014, construction contracts awarded in Singapore has increased by 5.4% YoY despite a contraction in H2 2014 (-1.8% YoY).

� A breakdown of the figures shows that demand from the private sector contracted by -10.8% YoY in 2014 due to easing residential, commercial and industries sectors.

� On the other hand, demand from the public sector has increased by 28.1% YoY in 2014, driven by construction of Housing and Development Board (HDB) public housing, the Thomson-East Coast Line project (extension of the Mass Rapid Transit system) and preparation work for the new airport.

� Construction demand in Singapore will remain healthy, but is likely to decrease slightly over the next one year. Public contracts are likely to remain strong, supported by large-scale projects such as the construction of HDB housing and the expansion of the MRT. On the other hand, demand from the private sector is expected to remain weak as a result of measures to control real estate speculation in most sub-segments such as the residential and industrial segments.

6. Malaysia / Automobile Sales Forecast: Slow Expansion Expected

(Source：Malaysian Automotive Association)

� Automobile sales in Malaysia increased by 1.6% YoY to a 3 year peak of 666 thousand units in 2014.

� Sales of passenger vehicles increased by 2.0% YoY to 588 thousand units, while sales of commercial vehicles decreased by -1.3% YoY to 78 thousand units.

� Perodua, the largest manufacturer in Malaysia, continued to maintain its top position in 2014 with 196 thousand units (29.3% market share), followed by Proton at 116 thousand units (17.4%). Toyota came next with 103 thousand units (15.3%). Honda, which launched several new models, increased sales greatly by 50.3% YoY to 77 thousand units (11.6%).

� It is likely that the Malaysian automobile market will slowly expand over the next one year as stable economic growth and launches of new models that meet the requirements of the EEV (Energy Efficient Vehicles) policy introduced by the government in 2014 are expected to boost automobile demand. Local industry associations expect sales in 2015 to increase by 2.0% YoY to about 680 thousand units.

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RHS)

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(6 month Ave, LHS)

Private Sector Demand

(6 month Ave, LHS)

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New Car Sales(LHS)

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7. Malaysia / KL Office Vacancy Rate & Rental Index

Forecast: Office Rentals Expected to Remain Stable

(Note) Due to a change in data, figures for 2Q/13 are estimation

（Source：Jones Lang LaSalle）

� Office rents in the Central Business District (CBD) in Kuala Lumpur have continued to inch up by 1.4% in Q4 2014.

� There were some new supply additions such as Menara Hap Seng 2 in H2 2014, however the vacancy rate has been sustained at 14.4% in Q4 2014, supported by relocation and expansion activities of existing tenants.

� New office supply in 2015 will be increased slightly with completion of two prime office buildings (Naza Tower and IB Tower) but still be lower.

� Office rents and the vacancy rate are expected to remain stable over the next one year, along with the sustained demand that should be able to absorb the new supply, in line with the stable growth of the Malaysia economy.

8. Thailand / Automobile Sales Forecast: Positive Recovery Expected

(Note) Sales soared by 477% YoY on November 2012.

（Source：Thai Automotive Industry Association）

� Thailand’s automobile sales in 2014 decreased by -33.7% YoY to 882 thousand units.

� This was mainly due to the decrease in consumer confidence caused by political turmoil as well as the distortion by the high base in H1 2013 from the backorders of the government’s “first time car buyers” scheme that ended in 1Q 2013.

� Toyota’s sales decreased by -26.6% YoY to 327 thousand units (37.1% market share), followed by Isuzu, which decreased by -22.3% YoY to 160 thousand units (18.2%), and Honda, which decreased by 50.0% to 106 thousand units (12.1%).

� Automobile sales in Thailand are expected to recover over the next one year as the high base effect that resulted from the tax refund policy has ended and the political situation has stabilized. Major manufacturers expect sales to increase by 10% this year to about 970 thousand units.

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(RM / square metre � year)

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9. Thailand / Shipment Index of Textile Products Forecast: Continued Downturn Expected

（Source：Bank of Thailand）

� The shipment index of textile products in Thailand decreased by -2.2% in H2 2014 compared to the same period last year.

� Textile manufacturers have continued to shift their operations to neighbouring countries such as Vietnam, Indonesia, Cambodia and Myanmar as Thailand had raised its minimum wage across Thailand. Also, the industrial demand, which accounts for 10 to 20 percent of overall demand in Thailand, has continued to slump mainly due to a fall in domestic automobile production.

� Thailand’s textile industry is expected to continue to stagnate over the next one year. Industrial demand for textiles will pick up gradually with the recovery of the automobile sector. However, textile export, which is the major contributor to overall shipment, is not expected to fully recover. In addition, the production bases in Thailand will continue to move to neighbouring countries with lower production cost.

10. Thailand / Cement Production Forecast: Slow Return to Recovery


� Thailand’s cement production in H2 2014 decreased by -5.9% YoY.

� Domestic demand, which accounts for about 85% of total demand, contracted by -2.2% YoY. Public demand has continued to slow down due to political instability, while private demand has also declined due to weaker demand for commercial buildings and urban housing.

� Exports, which account for about 15% of demand, shrank by -22.9% YoY as competition intensified with other ASEAN countries such as Vietnam, which had stepped up its exports.

� Cement production in Thailand is expected to improve slowly over the next one year. Exports to the region are likely to remain weak as competition intensifies with neighbouring countries. On the other hand, domestic demand is expected to gradually recover with the stabilization of the political situation, a low interest rate environment as well as greater progress with releasing certain large public infrastructure projects such as expressways and railways.

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YoY (RHS)

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11. Thailand / Retail Sales Index Forecast : Gradual Recovery Expected


� Thailand’s monthly retail sales index in Jul-Nov 2014 declined at average pace of -4.3% YoY. The decline pace is deemed to have moderated compared to corresponding average pace of -8.3% YoY for H1 2014.

� Imposition of military coup in May 2014 ended almost 8 months of riots in Thailand, allowing domestic retailers to resume normal operations in the country's main retail hub of Bangkok. Thailand consumer confidence index also saw meaningful recovery from 70.7 in May 2014 to 81.1 in Dec 2014.

� Strong improvement in tourist arrival is observed for Thailand in 4Q14 with the monthly visitation number achieving a historic high of 2.84 million in Dec 2014.

� Unless major political instability surfaces in Thailand again, these favorable trends are expected to support recovery of Thai retail market over the next one year.

12. Thailand / Bangkok Office Vacancy Rate & Rental Index

Forecast : Rentals Likely to Increase Gradually


� Office rents in the Central Business District (CBD) in Bangkok increased by 2.2% QoQ in Q4 2014.

� Vacancy rate has improved from 7.8% in Q3 2014 to 6.1% in Q4 2014 as no new supply came on stream in the quarter and demand has also recovered amid the more stable political situation.

� Office rentals are likely to increase gradually over the next one year. Although some office buildings (such as AIA Sathorn Tower and Bhiraj Tower, etc.) are expected to be completed in 2015, demand will continue to recover amid the easing of political uncertainties. Therefore, demand/supply balance for office space in CBD is expected to be tight as a whole.

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13. Indonesia / Automobile Sales Forecast: Slow Recovery Expected

（Source：Astra International）

� Automobile sales in Indonesia declined by -1.7% YoY in 2014 to 1.21 million units.

� This was due to rising fuel prices from reduced subsidies and high policy interest rates that were put in place to control inflation, despite the steady sales of LCGC (Low Cost Green Car) models under the government scheme that increased their market share substantially to 14.2% (172 thousand units) of total sales.

� Toyota’s sales decreased by -8.1% YoY to 399 thousand units (33.1% market share), while Daihatsu decreased by -0.4% YoY to 185 thousand units (15.3%). On the other hand, Honda increased its sales greatly by 73.9% to 159 thousand units (13.2%), thanks to robust sales of the Mobilio, its blockbuster compact MPV model, thus allowing it to overtake Suzuki (12.8%) to come in third in sales overall.

� The drop in fuel prices and new launches from major manufacturers should result in a slow recovery in automobile demand over the next one year. Local industry associations expect sales to increase by about 3% in 2015 to about 1.25 million units.

14. Indonesia / Motorcycle Sales Forecast: Slow Growth Going Forward

（Source：Astra International）

� Motorcycle sales in Indonesia increased 1.6% YoY to 7.87 million units in 2014.

� Although rising fuel prices and continuously high interest rates have slowed down the rate of sales growth, steady economic growth and higher purchasing power due to rising income levels have supported the motorcycle market in the country.

� Honda’s sales increased by 7.5% YoY to 5.05 million units (64.2% market share), while Yamaha came in second, decreasing by -4.9% to 2.37 million units (30.1% share).

� Motorcycle sales in Indonesia are expected to continue to grow over the next one year. However, the rate of growth is expected to be slower due to fuel price hike and persistently high interest rates. Local industry associations predict that motorcycles sales in 2015 will increase by about 1.8% to around 8 million units in 2015.

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15. Indonesia / Garment, Thread & Textile Exports

Forecast: Stagnation Expected

（Source：Bank Indonesia）

� The value of Indonesia’s textile exports in the second half of 2014 decreased by -1.9% YoY.

� Indonesia’s export volume grew steadily as demand for textiles from major export destinations such as the US and other developed countries were slowly recovering. However, export prices have stayed low, especially in the segment of the basic product, where the small and medium-sized companies in Indonesia are engaged in. This was due to increased competition from larger production capacity in the region and sluggish price trend in the raw materials (synthetic fibre, yarn, etc.) market.

� Export value of textile products is expected to stagnate over the next one year. Demand for textile products is expected to recover slowly as overseas economies recover gradually. However, the manufacturers will face increasing downward cost pressures due to further competition with other textile makers in the region. Hence, Indonesia’s textile export value is likely to continue to stagnate.

16. Indonesia / Jakarta Office Vacancy Rate & Rental Index

Forecast : Office Rentals Expected to Remain Stable


� Rents for office space in the Central Business District (CBD) eased slightly by -0.9% QoQ in Q4 2014 but still remained at a firm level (increased by 1.3% YoY).

� The overall demand was subdued amid the slower economy in 2014. However, the office vacancy rate remained at a low level of 3.3% as of Q3 2014 due to lack of new supply. There has been no new office supply in the CBD in 2014 and the supply of new office buildings in the area has been low since 2011.

� Going forward, demand for office space will recover gradually in line with the improvement in economic condition in the country. Rental is expected to remain stable over the next one year at current level, although vacancy rate is likely to be pushed up slightly in the near term due to the new supply expected in 2015.

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Thread & Textile

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Vacancy Rate

(RHS)

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17. Philippines / Automobile Sales Forecast: Continued Growth Expected

（Source：CAMPI）

� Automobile sales in the Philippines increased by 29.5% YoY to 235 thousand units in 2014.

� This is due to increasing consumption as a result of steady economic growth, as well as new models from automobile manufacturers.

� Sales of passenger vehicles increased by 47.8% YoY to 90 thousand units, while sales of commercial vehicles increased by 20.2% to 144 thousand units.

� Toyota’s sales increased by 41.0% YoY to 107 thousand units (45.4% market share), followed by Mitsubishi Motors which increased sales by 16.0% YoY to 50 thousand units (21.3%).

� Employment in the manufacturing and service sectors is set to grow, while remittances from Overseas Filipino Workers (OFWs) are expected to continue to increase, resulting in sustained demand growth over the next one year. The decline in fuel prices is also expected to boost automobile demand. The local industry association and automobile manufacturers forecast that automobile sales in 2015 will increase by about 15%.

18. Philippines / Manila Office Vacancy Rate & Rental Index

Forecast : Office Rentals Likely to Be Stable


� Rents for office space in the Makati district (the Philippines’ metropolitan area) in Manila grew by 1.6% QoQ in Q4 2014.

� New office supply in H2 2014 was lower than expected as some developments were delayed to 2015.

� Meanwhile, office vacancy rate was stable at 4.1% in Q4 2014 due to the firm demand from various sectors such as manufacturing, pharmaceutical and logistics. This is in addition to the traditional demand from Business Process Outsourcing (BPO) companies.

� Office rents are expected to remain stable over the next one year amid the higher new supply coming on stream, since demand is also expected to be firm. As it is expected that there will be substantial new supply of more than 300k sqm in full year 2015 (such as MDI Corporate Center, etc.), the vacancy rate may be pushed up temporarily, but should still remain at a healthy level.

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19. Vietnam / Computer & Electronics Components Exports

Forecast: Continued Growth Expected

(Note) “YoY” shows the figures from November 2012, as this chart was created based on data compiled

from November 2011 onwards. （Source：CEIC）

� Vietnam’s exports of electronic components in the second half of 2014 increased by 9.9% YoY.

� The export value of electronic components has continued to increase as major manufacturers from Japan and South Korea have invested heavily to expand production capacity.

� Mobile phones and their components make up the majority of exports and have increased by 6.6% YoY, while PCs and their components have also increased by 16.3% YoY.

� The demand for electronic components is likely to increase over the next one year as telecommunications devices such as tablets and smartphones become increasingly common. In addition, continued investment by overseas manufacturers in production plants for smartphones and major appliances will boost Vietnam’s electronics export value.

20. Vietnam / Automobile Sales Forecast: Steady Growth Expected

（Source：VAMA）

� Automobile sales in Vietnam increased by 42.8% YoY to 158 thousand units in 2014.

� This was mainly the result of improvement in consumer sentiment amongst car buyers, due to the recovery in the Vietnamese economy, as well as a reduction in car registration taxes in some major cities such as Ho Chi Minh City and Hanoi.

� Sales of passenger vehicles rose significantly by 33.7% to 80 thousand units, while sales of consumer vehicles rose greatly by 43.6% to 52 thousand units on the back of strong sales of pickup trucks and medium-to-large-sized trucks.

� Toyota’s sales increased by 23.8% to 41 thousand units (30.8% share), followed by Kia, which increased sales by 29.0% to 23 thousand units (16.8%).

� Automobile sales in Vietnam are expected to remain healthy over the next one year as private consumption continues to rise and the reduction in car registration taxes continues to have a positive effect on sales. Local industry groups expect sales in 2015 to increase slightly to around 160 thousand units.

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21. Vietnam / Textile Exports Forecast: Continued Growth Expected

（Source：General Statistics Office）

� Vietnam’s textile export value in H2 2014 increased by 11.6% YoY.

� Demand from major export destinations in Asia (Japan, South Korea, etc.) and the US has grown steadily.

� Also, manufacturers have continued to shift production bases to Vietnam as production costs in China have risen and the expansion of Chinese domestic demand has resulted in sluggish growth in export capacity. In addition, rising labour costs in Thailand have also caused production to shift to Vietnam, pushing up export values.

� Vietnam’s textile export volume is expected to increase over the next one year. Vietnam has competitive export advantages in its main sewing industry as it has skilled labour at a relatively low cost. Also, textile manufacturers in neighbouring countries such as China and Thailand are likely to expand their production facilities in Vietnam. Thus it is expected that Vietnam’s textile exports will grow at faster rate compared to other textile producing countries.

22. India / Crude Steel Production Forecast: Likely to Improve

（Source：World Steel Association）

� India’s crude steel production rose by 2.5% YoY to 83.2 million tons in 2014.

� Increase of domestic demand, which is the major contributor to the overall production, remained subdued.

� Demand from key end-use sectors of steel like construction and infrastructure failed to pick-up due to a continued economic slowdown. A change in government at the Center and several state-level elections resulted in muted economic activity in 2014.

� Going forward, growth in steel demand is expected to improve over the next one year and gain pace thereafter. Government spending will boost demand from steel-intensive infrastructure and construction sectors, which account for 40% of steel demand in India. Rising consumer sentiment will aid recovery in other end-use sectors like automobiles and consumer durables. Overall, domestic steel demand is forecasted to grow by 5-6% YoY in 2015.

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Textile Export Value(LHS)

(USD Hundred Million)

-20%

-15%

-10%

-5%

0%

5%

10%

15%

0

2

4

6

8

10

12

14


YoY (RHS)

Steel Production

(Million tons)

‘

14

23. India / Automobile Sales Forecast: Slow Return to Recovery

(Source：Monthly Review of the Indian Economy)

� Automobile sales in India in 2014 decreased by -1.9% YoY to 3.18 million units. This was due to sluggish sales in the beginning of the year as consumers held back on purchases amidst a weakening economy and uncertainty over the new government’s automobile policies.

� On the other hand, consumer confidence was restored when the new government came into power, as the excise duty rebates that were originally stipulated to end in July 2014 were extended to December, thus reviving sales in the second half of the year.

� First-placed Maruti Suzuki’s sales increased by 8.3% YoY to 1.15 million units (35.8% market share), while Honda came in fifth with a significant 67.0% YoY increase in sales (5.6%). However, second-placed Tata’s sales decreased -23.9% YoY to 444 thousand units (13.8%), while fourth-placed Mahindra also declined by -8.8% YoY to 391 thousand units.

� The Indian economy is expected to make a slow recovery this year. Coupled with new model launches from automakers, automobile demand in India is expected to make a recovery over the next one year. Local industry groups expect automobile sales to increase 7% YoY to about 3.4 million units in 2015.

24. India / Motorcycle Sales Forecast: Continued Positive Growth Expected

(Source：Monthly Review of the Indian Economy)

� India’s motorcycle sales increased by 11.5% YoY to 16.01 million units in 2014.

� Sales have continued to experience positive growth as confidence in the new government has led to a recovery in consumer demand in the second half of the year, especially in urban areas. Steady demand from rural areas also contributed to the growth.

� The scooter segment has experienced tremendous growth in recent years, with sales increased by 28.9% YoY to 4.33 million units. The mainstay motorcycle segment also increased by 6.2% YoY to 10.91 million units.

� Sales at Hero Motocorp increased 6.5% YoY to 6.44 million units (40% market share), while second-placed Honda Motorcycle and Scooter India increased sales greatly by 29.9% YoY to 4.17 million units (26%).

� Steady demand from rural areas is expected to continue to prop up the industry over the next one year. Local industry groups expect sales to increase by 6.2% YoY to about 17 million units in 2015.

-80%

-60%

-40%

-20%

0%

20%

40%

0

100

200

300

400

500

600


(1,000 units)

Passenger Car Sales(LHS)

Commercial Car Sales

(LHS)

YoY (RHS)

-60%

-40%

-20%

0%

20%

40%

0

50

100

150

200

250


YoY (RHS)

New Motorcycle Sales(LHS)

(10,000 units)

15

Appendix

Real GDP Growth Consumer Price Index (CPI)

Export Growth Rate Exchange Rates to USD (indexation)

Unemployment Rate Crude Oil Prices (WTI)

-2

0

2

4

6

8

10

12

14

1Q/12 3Q/12 1Q/13 3Q/13 1Q/14 3Q/14

Singapore Malaysia Thailand

Indonesia Philippine Vietnam

India

(%)

(Source) CEIC

19.4%

-2

0

2

4

6

8

10

12

14



Indonesia Philippines India

(%)

(Source) CEIC

-20

-10

0

10

20

30

40

50

1Q/12 3Q/12 1Q/13 3Q/13 1Q/14 3Q/14


Indonesia Philippines Vietnam

India

(%)

(Source) CEIC

70

80

90

100

110

120

130

140

150


SingaporeMalaysiaThailandIndonesiaPhilippinesIndia

(1/04=100)

(Source) CEIC

0

1

2

3

4

5

6

7

8

9

10

1Q/12 3Q/12 1Q/13 3Q/13 1Q/14 3Q/14


Indonesia Philippines Vietnam

(%)

(Note) The figures of Indonesia show annual data. (Source) CEIC

0

20

40

60

80

100

120

140


(USD / barrel)

(Source) Bloomberg

16

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Documents

SINIR 2014-121 ASEAN and India Industry Monitor · The manufacturing and assembly sectors (automobiles and electronics) and materials sectors (textiles, cement and steel) continued