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Implementation Of ASEAN Economic Community To Reduce Big Japanese Automakers' Dominance In The Region, Says Frost & Sullivan

HONG KONG and SINGAPORE, Feb 6, 2013 /PRNewswire/ -- The implementation of ASEAN Economic Community (AEC) in 2015 will likely reduce big Japanese automakers' dominance in the region which will be on a more level playing field, says Frost & Sullivan.

Mr. Dushyant Sinha, Principal Consultant, Automotive & Transportation Practice Asia Pacific at Frost & Sullivan said that smaller Japanese players such as Suzuki, Mitsubishi and Isuzu and new entrants will gain the most from the implementation of AEC, as the level playing field will make it easier to expand their presence and challenge incumbents.

"However, big Japanese OEMs are still likely to continue to lead the market," he added.

New analysis from Frost & Sullivan ( Strategic Growth Opportunities from AEC Implementation and New Government Policies in ASEAN  finds that market realities and existential threat perceptions are the biggest drivers for AEC integration.

However, Dushyant said that given the sheer scope and complexities of various outstanding issues, there is a strong likelihood that closer to 2015 some of the elements of AEC will be put on hold.

He noted that Indonesia, Thailand and Malaysia are the key automotive markets in ASEAN, accounting for 89 per cent of the passenger car market. "However, at the global level, Indonesia, Thailand and Malaysia do not figure amongst the top-15 passenger car markets," he added.

He said that the BRIC countries are much bigger than the key ASEAN markets in terms of industry volume, and compete aggressively for investment in the automotive sector.

He added that as one market, ASEAN is currently at the cusp of a high growth phase, along with the BRIC markets.

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