Malaysias vehicle sales are projected to grow 1 percent to almost 609,000 units this year, according to a forecast by Frost & Sullivan. The countrys economy is expected to continue recording positive growth this year, driving consumer confidence, the company said.
The research firm noted that global uncertainties such as the United States-Iran conflict could affect the Malaysian automotive industry by impacting long term investment decisions.
Key factors that will likely aid growth in the countrys automotive market this year include strong and growing consumer confidence and launches of new vehicle models, according to Vivek Vaidya, associate partner and senior vice president of mobility at Frost & Sullivan.
New product launches have assumed more importance than ever for growth of the total industry volume, Vaidya said in a Jan. 14 news release. However, factors such as ongoing global headwinds and repeated postponement of the National Automotive Policy have created uncertainty, both of which will need to be overcome by positive consumer sentiments to maintain favorable growth. Locally, factors expected to boost sales include increasing customer confidence, aided by the stable political atmosphere and increase in infrastructure investments.
Malaysia’s government introduced the NAP in 2006 to facilitate transformation and integration of the local automotive industry with regional and global networks. The government revised the policy in 2014, emphasizing green initiatives and market expansion, with the objective of making Malaysia the regional energy-efficient vehicle hub by 2020. Carmakers provided input for an NAP 2019, but implementation of the revised policy has been delayed.
Vaidya said the industry expects the NAP to provide clear direction to transform itself in the next decade. There is an urgent need for the Malaysian automotive industry to modernize itself and offer exciting products and services in line with global trends, he asserted. Industry players are relaying on NAP 2020 to guide and seamlessly transform themselves.
Vehicle demand in Malaysia edged up 1 percent last year due to the strong performance of new model launches in the SUV segments, according to the market research firm. Sales in the June to August period were significantly lower than in the year-earlier period, which corresponded to tax breaks announced by the government in 2018 that pushed up sales.
Passenger vehicle sales reached 549,232 units in 2019, Frost & Sullivan found, backed by strong performance in the passenger vehicles segment and resurgence of the SUV segment. The launch of a number of new models and affordable prices in the segment supported the growth.
Commercial vehicle sales in Malaysia dipped last year to 54,442 units sold. With the exception of panel van, all other commercial vehicle segments witnessed negative year-on-year-growth, Vaidya said.