MAA MAY REVISE CAR SALES FORECAST FOR THIS YEAR
Sales may be even better in next 6 months as carmakers offer big discounts
THE Malaysian Automotive Association (MAA) will likely revise upwards its forecast total industry volume (TIV) of 580,000 units for this year, in light of the stronger car sales last month.
“Currently, the automotive sector looks very promising. Last month’s vehicles sales was 18 per cent, or 7,854 units, higher than in April.
“I believe car sales for the second half of this year will be even better than in the first half,” MAA president Datuk Aishah Ahmad told NST Business.
She said MAA’s revised TIV forecast would probably be updated next month.
According to MAA, Malaysia’s automotive sector recorded a stable growth in the first quarter, registering a 7.3 per cent increase in sales to 140,839 units, compared with 131,251 units recorded in the same period last year.
Last month, the industry vehicles sales recorded 50,600 units, compared with 44,668 units registered in the same period a year ago, driven by the pre-Hari Raya festive season promotions and launches of new models.
In terms of year-todate May sales, the automotive sector recorded 234,186 units for both passenger and commercial vehicles, compared with 218,121 units registered in the same period last year.
Meanwhile, carmakers are banking on heavy promotions and big discounts on selected vehicle models to capture bigger slices of the market.
“This is ongoing for all car companies. They will give promotions to improve their market share, especially during Ramadan. They are trying to attract more buyers,” she said.
Meanwhile, Bermaz Auto Bhd (BAuto) chief executive officer Datuk Seri Ben Yeoh Choon San said car promotions were intended to reduce overhang in inventories.
BAuto is a distributor of Mazda vehicles and spare parts.
“However, sales are still relatively slow despite these heavy promotions as the financial institutions are controlling loan approvals,” he said.
Yeoh added that the overall consumer market was soft due to the general perception that there was an economic downturn.
“As a result, consumers are more cautious in their spending. Meanwhile, the ringgit is also weakening against major currencies, especially the yen, US dollar, British pound, euro and Australian dollar,” he said.
Yeoh said consumers also delayed their purchases to wait for new model launches, and that the sentiment was expected to continue till the fourth quarter.
He said cars were “high ticket” items and customers who could afford to spend would expect more and better incentives.
“The values of used cars have also dropped due to lower prices of new cars through heavy discounting. This again puts off consumers’ purchase intentions,” said Yeoh.
He believed used car dealers, on their part, were still adjusting to the lower value of their inventories and, therefore, were more reluctant to accept trade-ins.
“This choked the secondary market and prevented a smooth trading system. This compounding effect will last for some time.”
Yeoh said the situation could only improve when distributors accepted that the market had contracted.
“Distributors should consolidate their marketing and sales strategies to give consumers’ value and sustainable ownership experience,” said Yeoh.