In the post-pandemic era, the region is expected to become the center of global innovation in the automotive industry.
FREMONT CA: The automotive sector in Southeast Asia has witnessed massive growth in the last couple of years, owing to its ever-expanding and innovative tech communities. The pandemic, especially, has critically impacted consumer behavior, transforming the region's automotive sector landscape. Before Covid-19 hit, 37% of overall southeast Asian consumers preferred to use personal vehicles for the commute. But since the outbreak, the proportion has substantially increased to 52%. Many consumers are rethinking the type of vehicle they want to buy that will suit their requirements while also maintaining good credit protection. Fuel-efficient vehicles are becoming mainstream in the region, but concerns over the lack of charging infrastructure in Southeast Asia is slowing the adoption of Electric Vehicles. There is also the growing popularity of subscription services where consumers rent vehicles on a subscription basis, relieving themselves of the worry of hefty loans and maintenance costs. While most Southeast Asian customers prefer personal shopping, there exists a growing interest in virtual shopping and services.
In the aftermath of the covid-19 pandemic, one-third of the SEA's consumers are delaying their new vehicle purchases. Around 39% of customers now plan to buy a new vehicle. This percentage is substantially higher than consumers in other significant markets, such as the data in Japan is 18% and in the US is 17%. Additionally, most Southeast Asian consumers are also likely to acquire credit protection on their next vehicle loan. This indicates that the region is witnessing a growing concern about the financial burden that consumers are facing due to the pandemic. In the wake of the pandemic, the concern regarding social distancing, and changes in consumer behavior, it is evident that the automotive industry of SEA must embrace digitalization to meet the ever-increasing needs of the region. Southeast Asia will also witness the launch of several initiatives and policies by local governments that will drive the transformation in its automotive industry.