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ASEAN auto sales recovering: Ford, GM

MANILA: Automotive markets in the Association of Southeast Asian Nations (ASEAN) are recovering strongly after the regional economic crisis with falling import tariffs seen boosting medium-term growth, US auto executives said on Monday.

Ford Motor Co. predicted that ASEAN as a group would become the world's fourth largest automotive market by 2005 after the United States, Japan and Germany.

"The crisis seems to be subsiding and in most of the economies, most of these markets, they are rising significantly," said Basil Drossos, executive director of Southeast Asia for General Motors Asia Pacific (Pte) Ltd.

Gerald Kania, president of Ford's ASEAN operations, said that while the collapse of regional economies had been dramatic, "the recovery has also been surprising."

He told a joint news conference at a regional automotive conference here that ASEAN automotive sales should be "back to pre-crisis levels sooner than later."

The financial crisis starting in mid-1997 hammered the auto market, with total vehicle sales in the region plunging to just 500,000 units in 1998 from close to 1.5 million units in 1996.

Brossos said that "the countries are recovering at different rates but in general throughout the region and in India," there was a "significant return to prosperity."

Kania said ASEAN automotive markets were still dominated by Japanese manufacturers but Brossos said GM's outlook is changing because of its equity tie ups with Japanese players Isuzu, Suzuki and Fuji Heavy Industries, which produces Subaru.

Kania said the growth of the automotive sector in the region should receive a fresh impetus from ASEAN members' decision to reduce tariffs to between zero and five percent on most ASEAN imports including motor vehicles by 2003 under the accelerated ASEAN Free Trade Agreement.

"We work very hard with the governments for the implementation of the AFTA," he said.

ASEAN member countries by themselves have "pretty small automotive sectors," but taken as a whole "by the year 2005, ASEAN could be the fourth biggest automotive market in the world" after the US, Japan and Germany, Kania said.

ASEAN groups Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.ÑAFP