Driven_Web_Series_2014_Honda_City_vs_Toyota_Vios_vs_Nissan_Almera_003

The Malaysian Automotive Association (MAA) has released vehicle production and sales figures for August 2015, which show that the auto industry saw sales of 53,452 units last month. That total is 2,326 units or 4.5% higher than the same month in 2014, but 5,194 units lower than the preceding month, July 2015.

The 8.9% drop is a continuation of a weak trend, caused by a combination of factors. MAA cites uncertainties among businesses due to the weakening of the ringgit (the RM is currently trading at 4.3 to the US dollar, and is Asia’s worst performing currency this year), a gloomy overall global economic outlook and consumers who remain cautious in spending on big ticket items as a result.

Aug-2015-Car-Sales

Year-to-date sales till end-August is 434,282 units, 10,269 lower than the same period last year. 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. 670k is still 0.5% higher than the 2014 TIV of 666,465 – will the target be hit?

Should the ringgit continue to slide against major currencies such as the USD and euro, car prices could be heading north in the near future.

“If the situation continues, I do not rule out the possibility of price increases by early next year. Last year, when ringgit was at RM3.80 to RM3.90 to the euro, we did not discuss about currency, but now we talk about RM4.90 per euro and this is a significant devaluation and creates pressure,” BMW Group Malaysia CEO Alan Harris said last week.