Chinese auto firms’ presence in ASEAN will grow slowly

Subject

ASEAN automobile sector update.

Significance

Geely Automobile is expected to use ASEAN as a springboard into global markets having formally completed the deal on June 23 to acquire a 49.9% minority stake in Malaysia’s ailing Proton car brand from DRB-Hicom, the Malaysian conglomerate that retains the remaining 51%. The Chinese manufacturer said in early June that Proton plants would produce 500,000 vehicles by 2020, up from 72,000 in 2016.

Impacts

• Chinese technology transfers will add value to ASEAN’s auto industry, which needs to move beyond basic assembly.
• Malaysia will stay an important producer, but will play a secondary role to regional hubs Thailand and Indonesia.
• China automakers will need to invest in marketing to make their brands better known in South-east Asia.