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Overview of Laos’ Automobile Market in 2021

Automobile sales in Laos in 2021 increased by 16.7% year-on-year to nearly 17,000 units, the first increase in six years. Passenger car sales went up 34.9% to 5,531 units of which SUVs rose 42.3% and the sedan / hatchback category increased 23.5%. Commercial vehicle sales went up 9.5% to 11,330 units. Although bus sales fell, truck sales increased double digits driven by rising demand for freight transportation.

Laos: Recent Developments

Market Trends

・Automobile sales (substituted with import license data) in 2021 increased 16.7% year-on-year to 16,861 units. - Automobile sales went up for the first time in six years thanks to economic recovery following the corona pandemic. - Passenger vehicle sales rose 34.9% to 5,531 units while commercial vehicles increased 9.5% to 11,330 units. ・In the first five months of 2022, automobile sales increased 17.2% to 9,453 units. Passenger vehicle sales dropped 13.2% to 2,241 units but commercial vehicles increased 17.2% to 9,453 units.

Industry Trends

・In October 2021, Laos set a goal to make 1% of all automobiles in the country BEV by 2025, raising that figure to 30% by 2030. - In order to promote the use of BEVs, Laos has decided not to limit the number of vehicles imported. In addition to quality, safety and aftersales service such as maintenance, the vehicles must meet international standards for waste disposal. - In addition to supporting the establishment of production plants for BEV parts, the government will invest in expanding domestic charging facilities. Tax exemptions are also planned for imports of related parts and equipment. - Laos’ state-owned power company Électricité du Laos was selected as the service provider for the installation of charging stations. The establishment of BEV-prioritized parking spaces in public parking lots is also being considered. - The road tax on BEVs will be reduced by 30% compared to gasoline vehicles with similar output. - Laos' large fuel imports are a factor in its trade deficit. The introduction of BEVs is aimed to reduce oil imports and GHG emissions.

Economic Trends

・The real GDP growth rate in 2021 was 2.1% (IMF, as of April 2022). It recovered from the previous year when it was minus 0.4% due to the impact of the corona virus, which was the first negative growth since 1997-1998. ・Real GDP growth forecast for 2022 is 3.2%.
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