Car Sales Plunge in SE Asia

Southeast Asia's car slump shows no sign of easing, The Nikkei reports. The newspaper says demand in the region's three largest markets Indonesia, Malaysia and Thailand plunged a collective 24% to 180,000 units in April. It was the smallest volume for the month in nearly 3.5 years.

Analysts attribute the continuing shrinkage to weak currencies, new taxes and political instability.

In Indonesia, sales began to fade in mid-2013 as the rupiah plunged nearly 40% against the U.S. dollar. Surging costs prompted carmakers to hike prices, further hurting sales. The country's auto trade group now expects sales this year to decline to a three-year low of about 1.1 million units.

In Malaysia, April sales plunged 23% to 45,200 units. Demand slowed in April when the country introduced a 6% tax on goods and services. Banks have tightened lending, with many demanding a guarantor for loans as small as 50,000 ringgit ($13,400).

Thailand's car market shrank 26% to 54,100 vehicles in April, marking the 24th consecutive month of year-on-year decline. Last year's military coup and a lack of economic progress since then continue to hurt demand.

The Nikkei says gains in the region's secondary markets, including the Philippines (+16%), Singapore (+115%) and Vietnam (+60%), weren't enough to offset the big losses in southeast Asia's biggest markets.