Malaysian Automotive Market Showing Declining Signs


Published on January 30th, 2018 | by Daniel Sherman Fernandez


Malaysian Automotive Market Showing Declining Signs

The Malaysian Automotive Association (MAA) is hoping that the review of the National Automotive Policy (NAP), which will be announced by the government in mid-2018, will improve the automotive industry and help boost vehicle sales.

MAA president Datuk Aishah Ahmad said the government has not engaged with MAA on the review of the NAP and that the details of the NAP 2018 have not been discussed with the industry.

“It’s just preliminary announcement that there are some changes in the NAP and we hope whatever announcements they make will be good for the industry and will boost industry sales and assist the industry for us to expand sales and make more money,” she told a press conference on the automotive market review for 2017 and outlook for 2018.

Last week, International Trade and Industry Minister Datuk Seri Mustapa Mohamed said NAP 2018 is still a work-in-progress, with consultations to continue for another four to five months. NAP 2018 will focus on mobility, next-generation vehicles, big data, lifestyle and connectivity.

With NAP 2018 also focusing on parts and components, Aishah concurred that this is a growth area based on industry figures.

She said NAP 2014 has helped reduce the prices of energy-efficient vehicles (EEV) slightly as EEV producers enjoyed incentives on local components.

Meanwhile she said the strengthening ringgit will help industry players, especially those who trade in US dollars and Japanese yen, as they will have better margins.

MAA is projecting a total industry volume (TIV) of 590,000 units in 2018, a 2.3% growth from 2017. This takes into account of factors like economic growth, rising cost of doing business, rising cost of living, continuation of the strict lending guidelines and ride-hailing services.

The TIV of new motor vehicles registered in 2017 declined marginally by 0.6% to 576,635 units in 2017 from 580,085 units in 2016.

Aishah said the local automotive market was subdued for much of last year.

For the second consecutive year, the TIV contracted, reflecting perhaps a down-cycle of the market that started in 2016.

“Despite our country’s economic recovery and the aggressive promotional campaigns undertaken by MAA members, sales remained essentially flat in 2017. This can be attributed to the inflationary pressures affecting consumers’ disposable income, which consequently resulted in cautious consumer spending,” said Aishah.

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