Despite the unpredictable repercussions stemming from the implementation of the goods and service tax (GST), Frost & Sullivan Malaysia is forecasting new car sales in the country to grow by 3.15% this year, Bernama reports.

The company’s senior partner, Kavan Mukhtyar, believes that the implementation of GST will lead to a 1%-3% drop in new car prices. “At a broad level, we believe there will be some decline in car prices after the GST implementation for mass-market models, while the more premium models could go up slightly by 1%-2%.”

Mukhtyar said that sales for 2015 are projected to climb to 685,950 units, compared to 665,000 units in 2014, helped by lower fuel prices in the first quarter of 2015. Furthermore, “the high back orders in 2014 from the Perodua Axia and Proton Iriz are likely to support vehicle sales growth this year,” he said.

New passenger vehicle sales from the A- and B-segement are expected to form the bulk of the increase, as “consumers will focus on fuel-efficient vehicles” in light of the increased cost of ownership for private vehicles as well as tighter loan approvals by financial institutions.

On the local front, Mukhtyar expects the combined 53.2% market share of Perodua and Proton – the former with 33.1%, the latter with 20.1% – in 2014 to remain unchanged. Meanwhile, players such as UMW Toyota and Honda Malaysia are expected to further increase their market share in the non-national segment.


The latter, in particular, saw its market share grow by 4.2% last year to 13% from 2013 (8.8%), helped along by the introduction of the new City and Jazz. The increase also makes Honda Malaysia the new largest non-national player in the passenger vehicle market, just ahead of UMW Toyota’s 12.3% – the latter also improved its performance from the 10.6% share it had in 2013.

Frost & Sullivan says that further growth in the segment could be contributed by manufacturers looking to take advantage of the government’s incentives granted for projects in the energy efficient vehicle (EEV) segment. Additionally, the introduction of more locally-assembled (CKD) cars from major players are also expected to help the market expand.