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Despite complications, ASEAN auto industry still has plenty of momentum

The ASEAN project has seen trade barriers fall across the region, with important consequences for the automotive industry, writes the Economist Intelligence Unit’s Ana Nicholls

At the start of 2016, the ASEAN Economic Community (AEC) came into operation, promising to create a combined market of ten fast-growing countries with a population of 640 million and GDP of US$3trn. The market potential of Indonesia in particular had already made the ASEAN region an integral part of vehicle manufacturers’ global planning. Yet the dropping of tariff barriers under the AEC's Trade in Goods regulations did not result in the big bang that many had expected. Instead, the AEC's promise is only slowly being fulfilled.

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