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Total vehicle sales in M'sia set to soar
Publication Date : 13-02-2014
Total vehicle sales in January is expected to surpass the 55,066 units registered last year, mainly due to improved market clarity and aggressive sales promotions by car companies, industry experts said.
Frost & Sullivan partner and head of automotive and transportation practice for Asia-Pacific, Kavan Mukhtyar, noted that in January last year, many buyers were holding back their purchases on expectation that prices would drop after the elections.
“There was a bit of uncertainty and vehicle sales did slow down in the early part of last year leading up to the elections,” he said when contacted by The Star's StarBiz.
Kavan noted that another reason for weaker sales in January last year was due to some buyers holding back their purchases as they waited for the National Automotive Policy (NAP) to be revealed. The NAP was announced on January 20.
“With the NAP already announced, there is now better clarity,” he said, adding that he expected vehicle sales to be “marginally better” than last year.
“It (sales this year) will not be dramatic but it will be better than last year.”
Frost & Sullivan has projected vehicle sales to grow by 4.2% to 675,000 units this year, driven by positive economic conditions and continuous investment flow.
Meanwhile, an analyst said aggressive vehicle promotions leading up to the Chinese New Year (CNY) period were seen to help boost vehicle sales last month.
“We’re projecting a 10% year-on-year sales growth for January 2014,” he said.
He believes the rising cost of living recently would not hurt vehicle sales.
“There could be a slight dampening effect but vehicles are a necessity and people will still buy them if they need to,” he said.
The government had since September last year embarked on various subsidy rationalisation initiatives, including cutting fuel and removing sugar subsidies.
One industry observer said he did not expect January’s total vehicle sales to be affected by the NAP’s new tax structure on hybrid and electric vehicles.
Under the NAP, excise duty exemption will only be given to locally assembled or completely-knocked-down (CKD) hybrid and electric cars. The exemption for hybrids will end on Dec 31, 2015 and for electric cars on Dec 31, 2017. Existing stock of completely built-up hybrid and electric cars held by companies will still qualify for full tax exemption until the stock runs out.
“Car companies are still selling their old stock and this will add to total vehicle sales in January,” said the industry observer.
When contacted, Malaysian Automotive Association (MAA) president Aishah Ahmad said official vehicle sales for January would be announced next week.
The MAA has forecast total vehicle sales to grow 2.2% to hit a new high of 670,000 units this year.