First half 2015 passenger car sales drop 3.5%, MAA revises down full year TIV to 670,000 units

The Malaysian Automotive Association (MAA) has released vehicle production and sales figures for June 2015 and also January to June year-to-date, which is also the first half performance of the industry.

With 286,533 units sold in the first half of 2015, passenger vehicle sales slid 3.5% compared to the same period last year, when carmakers shifted 296,790 units. The difference is 10,257 units.

In the commercial vehicle market, numbers are down by 2.0% from 36,366 to 35,651 units. Combined, the total industry volume for the first half of the year is 322,184 units, a 3.3% drop from the 333,156 units recorded in Jan-June 2014.

Breaking down the passenger vehicle figures, all segments (passenger cars, window vans and MPVs) recorded year-on-year drops in volume except for the 4WD/SUV sub-segment, which chalked an amazing 58.7% jump from the first half of 2014. No prizes for guessing which model is fuelling the fire here. While passenger car figures remained largely stable (down 1.8%), MPVs were the biggest losers with a 30.6% decline.

MAA attributed the mild decline in TIV to “consumer sentiment following implementation of GST”. The Goods and Services Tax came into effect on April 1. Sales were high in March as many rushed to purchase cars in fear that automobiles would be costlier post-GST. As it turned out, that didn’t happen, but April was a slow month for the industry.

Post GST, and with the Malaysian economy not exactly in the pinkest of health (the ringgit has just fallen to a 17-year low versus the US dollar), consumers might be holding back on big ticket items such as property and vehicles.

Indeed, the MAA has revised downwards its TIV forecast for 2015, from the original 680,000 to 670,000 units, of which 591,800 are expected to be contributed by passenger vehicles, down from the original 600,700 units. Still, 670k is 0.5% higher than the 2014 TIV of 666,465.

Among the reasons for the revision are ongoing inflationary pressures, fluctuations in oil and commodity prices and the weakening of the ringgit versus the USD and other major currencies. Also cited are subdued business optimism and moderation in consumer spending due to economic uncertainty and increased cost of living.

It’s not all gloom though. MAA expects the car market to improve in the second half of 2015 as consumers get used to GST and spending returns to normal. The introduction of new models and aggressive promotions on the carmakers’ part will also help things along.

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