Southeast Asia’s consumer appetite to buying cars in 10 charts

17 May 2021 6 min. read
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Global professional services firm Deloitte has released its latest market analysis of consumer perceptions and trends in Southeast Asia’s automotive sector. A roundup of the report’s key findings across three topics – new car purchasing appetite, demand for electrical driving and openness for online buying – in ten charts.

Demand for cars

Across the board, the Covid-19 pandemic has resulted in an increase in the consumer preference for personal vehicles. Before Covid-19, an average 37% of overall Southeast Asian consumers preferred to commute by personal vehicles. With the outbreak of the pandemic, however, this proportion has significantly increased to 52%.

Preference for personal vehicles

Across Southeast Asia, the fuel-efficient vehicle is gaining traction amongst consumers as the choice for their next vehicle purchase. On average, about 38% of Southeast Asian consumers intend to acquire a more fuel-efficient vehicle than they had originally planned before Covid-19. This trend is especially pronounced in Indonesia, Philippines, and Thailand, where more than 40% of consumers have expressed this intention. 

Vehicle type preferences for next vehicle

Driving electric

When it comes to electrical vehicles, hybrid electric vehicles (HEV) are the most popular choice among fuel-efficient vehicle options, with consumers expressing lower preferences for battery-powered electric vehicle (BEV). For their next vehicle, 24% of overall Southeast Asian consumers prefer HEVs, while only 6% prefer BEVs.

On the other hand, 64% continue to prefer ICEs, while another 6% prefer others (including ethanol, CNG, and hydrogen fuel cell).

Powertrain preferences for next vehicle

As Southeast Asian consumers do not appear to be very willing to pay a premium for electric vehicles, government support for both manufacturing and sales is likely to be critical in encouraging uptake. On average, about two-thirds or 66% of Southeast Asian consumers expect to pay less than USD 50,000 for an electric vehicle. 

Expectations of price range for electric vehicles

Most Southeast Asian consumers intending to acquire an electrical vehicle expect to charge it at home. However, the importance of public charging networks is notably higher in Singapore, where 49% of consumers expect to be able to charge their EVs at public charging stations.

Location where people expect to charge their electrified vehicle most often

Buying a car

Overall, as a result of Covid-19, more than one-third of Southeast Asian consumers intend to delay their new vehicle purchases. On average, about 39% of Southeast Asian consumers intend to acquire their vehicle later than previously planned. This proportion is significantly higher than the proportion of consumers in other major markets, such as Japan (18%) and US (17%).

Meanwhile, about half or more of consumers across all Southeast Asian markets intend to acquire a less expensive vehicle than originally planned.

Intention to delay new vehicle purchases

Those seriously considering to purchase a new car spend considerable time researching their pricing and payment options, however, the amount of time spent researching varies significantly across the Southeast Asia region.

Consumers in Thailand and Vietnam appear to spend the most time researching their finance options, with 52% and 41% spending 5 hours or more respectively. On the other hand, more than one-fifth of consumers in Malaysia, Philippines, and Singapore do not conduct any research at all. 

Time spent researching finance options

While most consumers in Southeast Asia continue to prefer in-person experiences, there is still growth potential for virtual/online vehicle sales. Overall, an average of about 29% of Southeast Asian consumers prefer either a fully or partially virtual buying process.

Receptivity towards virtual buying processes

Convenience/ease of use and quicker transactions are the top perceived benefits of a virtual buying process. Furthermore, a significant proportion of consumers may also prefer to rely on virtual buying processes to minimise physical contact. In the Philippines, for example, 45% of consumers perceived the ability to minimise physical contact as the top benefit of a virtual buying process.

Perceived benefits of a virtual buying process

For car manufacturers, virtual servicing could be an important part of the aftersales process to retain existing customers in Southeast Asia. The majority of consumers across all Southeast Asian markets are interested in having their vehicle picked up from their home/office when it needs service.

However, pricing needs to be carefully considered: an average of 49% of Southeast Asian consumers would be interested in such virtual services if they are free, while 40% are willing to pay for such services. 

Receptivity towards virtual servicing

About the report

Deloitte’s report was based on the views of over 6,000 consumers in Southeast Asia across six geographies – Indonesia (n=1,017), Malaysia (n=1,013), Philippines (n=1,003), Singapore (n=1,013), Thailand (n=1,041), and Vietnam (n=1,021). The report is part of the firm’s global ‘Automotive Consumer Study’ research series.