Car production in Southeast Asia still isn't back to normal

After weeks of suspending production due to the COVID-19 pandemic, many car makers operating in Southeast Asia are slowly restarting production. While that may be the case, these facilities are still trying to meet the needs of the new normal such as the health and safety protocols. As such, the going is still slow, and is definitely not back to normal.

Starting May this year, many Southeast Asia countries including the Philippines, have moved to less strict quarantine protocols. As a result, some dealerships and manufacturing facilities have also started to open, albeit with a reduced capacity.

Back in May, Thailand, the largest car producer in Southeast Asia, has increased production by 130 percent compared to the previous month. Despite the increase, the 56,035 units produced by the Thais is a 69 percent drop compared to the figures from a year ago. Regardless, this is a sign that the industry is recovering, albeit slowly.

The Toyota manufacturing facility in Thailand

Remember that Toyota had to temporarily shut down their Thai based plants in order to comply with the Thai government’s safety protocols. Since May 25 however, they have already resumed operation.

In Malaysia, carmakers there including Perodua had also resumed producing cars in May. These companies are also following strict standard operating procedures released by the Malaysian government in order to keep the virus from spreading further.

Note also that in order to meet the needs of the new normal, many car brands are also implementing ways for a car buyer to go about the car buying experience through alternative means, usually through online tools.

As said by a production manager for a Japanese brand in Thailand, they are currently not having trouble in making enough cars to fill orders because the demand is still low.

>>> Related: Car sales down by 40% in Southeast Asia – the biggest drop in a decade

...Very low

In Indonesia, Philippines, Vietnam, Singapore, Malaysia, and Thailand, new car sales have dropped down by as much as 82 percent in April. This is according to a report compiled by the Nikkei Asian Review.

The aforementioned decline can also be blamed on the lockdowns and business operations restrictions in order to control the spread of COVID-19.

According to Surasak Suthongwan, the executive Vice President of Toyota Motor Thailand:

“People have become cautious about consumption and delaying their new car purchases.”

This point is further explained by Hajime Yamamoto, senior manager at the Normura Research Institute Thailand:

"The effects of measures to prevent infections have made themselves felt particularly strong in sales. Changing consumer mindsets are putting pressure on carmakers and dealers to enhance their digital services, while sluggish demand is threatening to trigger a major shakeout among dealerships,” Yamamoto said. 

Further than that, many industrial think tanks are predicting a 40 percent year-on-year drop in combined sales for 2020 for Indonesia, Thailand, as well as Malaysia.

As a result, some car makers have taken drastic measures like inviting employees to take “voluntary retirement.” Moreover, other car brands had to close several of its plants in Indonesia.

Everything, including car manufacturing, is forever changed by the COVID-19 pandemic

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