After six consecutive years of growth, including the highest ever total industry volume (TIV) in 2015, Malaysian auto sales finally saw a downturn in 2016, when registrations fell 13% to 580,124 units.
The final tally is remarkably close to the 580,000 revised forecast announced in July 2016 by the Malaysian Automotive Association (MAA), which means that everyone saw it coming – players and pundits alike (the original TIV forecast for 2016 made in January was 650,000). Consumer sentiment has not be rosy for awhile now, with a sluggish economy and a falling ringgit dominating the business pages.
“This could be attributed mainly to the slowdown in our country’s economy which impinged on consumer sentiment and business confidence. As a result, consumers and businesses were wary of purchasing big-ticket items such as new motor vehicles,” MAA president Datuk Aishah Ahmad told the press at a briefing today. Exactly what the REHDA boss would also say in a 2016 review, one can imagine.
Along with the lower sales, production of new vehicles decreased in tandem – at 545,253, output went down by 11.3% in Malaysia.
Aishah and the MAA committee members say that this year would be as challenging as the one before, and have set 590,000 units as the forecasted TIV for 2017, which would represent a marginal 1.7% increase from 2016 sales.
The club of manufacturers and distributors arrived at a flat growth based on a combination of macro and local factors. In the former category is the global economy, which is facing uncertainty surrounding the post-Brexit era and also the protectionist policies of US president-elect Donald Trump, who loves to aim threatening tweets at carmakers. Emerging markets such as Malaysia have been affected by these trends.
Locally, Bank Negara expects the economy to expand by around 4% to 5% this year, which isn’t stellar, but is something most would take given the circumstances. Private domestic demand would continue as the key driver of economic growth.
Malaysian household debt is the highest in the region though, which is why banks will continue the stringent approach when it comes to approving hire purchase loans. This has affected car sales in the lower end of the market, and is expected to continue to do so, Aishah said, pointing out that those earning below RM3,500 have found it hard to get HP loans.
Of course, the continued depreciation of the ringgit is not good for both rising import costs of MAA members, as well as consumer sentiment. Should inflation rise, buying a new car would naturally drop down priority lists. Another interesting factor cited by MAA is the rise of app-based ride hailing services such as Uber and Grab. This trend could have a “slight impact” on auto sales as some urban commuters might see a reduced need to own a car.
On a brighter note, the multiplier effect of mega infrastructure projects like the MRT (first portion of Line 1 in operation now), LRT extension and new highways could give a boost to the local economy, which in turn might lend a hand to car sales. Of course, the introduction of new models at competitive prices will also sustain buying interest.
Less than three weeks into the year, and we’ve already seen Honda (which overtook Proton to be No.2 in sales) introduce the new seven-seater BR-V, while Perodua’s facelifted Axia is now in showrooms. While the top national and non-national brands are strengthening their positions, this will be a busy and challenging year for all players. Expects aggressive promo campaigns and innovative strategies designed to lure punters into showrooms.
So, are we looking at signs of stagnation and a saturation point? Are car sales heading down for good or are these just speed bumps? “The auto industry is a cyclical business,” was Aishah’s reply. Looking forward, “there will be growth, but don’t expect double digits… it (car sales) will correct itself, but it will take some time,” she said, pointing out that the current crunch is nowhere near the what the industry faced in the depths of the 1998 financial crisis.
MAA’s TIV forecast for 2018 to 2021 show annual growth of between 2% to 5%. Lean times, yes, but one suspects that the car industry – and Malaysians’ love for the automobile – is merely taking a breather.
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The winner in 2016 is undoubtedly P2. The surprised here is Big H beat P1 for second place. The Best part is BMW & Merc improved on their 2015 performance.
Aishah used to fight for consumers to get lower car prices and higher spec cars. This was five years ago. then Government gave her datukship. Now, she changed her tune. She does not fight for the consumer but fight for keeping higher taxes and justifying the high car prices in Malaysia
MAA and MAI need to close down. They are a waste of time and tax payers money
It is not FLAT.Sales is going DOWNHILL.
Flat means no change.It is a SPIRAL INTO THE ABYSS.
No need fulfill Aishah’s forecast.
Car lovers,u buy preowned.
The sales of new cars will drop by 50 percent.
Then the rebates towards Raya will be 20-30 percent.Your cucu and children and loved ones will benefit.
Left only 11.5 months to go, where is the promise of 30% car price reduction in 2018 as “promised”…??? Who Association/Institute working on this, where is the progress update & where are we now…? HOW to keep car price reduced by 30% ??? [1]Excise Duty reduction: by 67% =(75%/80% to 25%/27%), [2]Import Duty reduction: CKD@100% =(10% to 0%) OR CBU@67% =(30% to 10%), [3] Sales Tax GST 6% *remain unchanged. Eg. Honda City price = rm40k [current tax 75%+10%+6%= 91% @ 74k] so: (after 30% car price reduction): 40k +28.5%tax= 52k
Ringgit sudah jatuh banyak. Professor Harvard sudah cakap Graduan Malaysia macam Dutch High School dropouts.
Tahun 2017, ekonomi lagi merosot. Malaysia Ringgit lagi jatuh
Aishah is just a glorified MAA report compiler and reporter. What does she actually do with the rest of her time. Just look at her, I have no confidence in her doing anything useful.
Solid proof that smart buyers rich or poor will always choose only Perodua, Honda, Toyota, BMW & Mercedes.
MAA should be controlling the price of our National cars. Both Proton and Perodua increased their prices quite a bit last year. Blaming the Ringgit. But then again, what is the purpose of creating a local car with local content in the first place?
Perodua increase of RM2773 on their Axia yesterday is a lot of money to the lower income group. This is not fair as the National Car company was created to give cheap cars to Malaysia.
This is why Japanese cars went 3 fold in price from the 90s to 2016. Before Proton and Perodua, one can buy a good brand new Japanese car for RM20k. But Mahathir said, he was going to create Proton and Perodua that will give Malaysians a cheaper and better car than the Japs. We trusted Mahathir.
After that, to protect Proton and Perodua, Government imposed heavy taxes and increased the prices of Japanese cars 3 fold and it became unaffordable.
Again, the spirit of a establishing 2 local national car companies was to give cheap cars to Malaysians. By the way, my first Saga I bought was RM18k in cash. Brand new car. Proton Saga 1.3S
So, the past 30 years, Malaysians had to rely on either Proton or Perodua as we, the rakyat, allowed the Government to protect Perodua and Proton. It is unfair to raise prices since we have supported Proton and Perodua all these years and conveniently blame the Ringgit dropping. After all 30 years still cannot have fully local content? Engineers at Proton and Perodua sleeping?
Secondly and more importantly, the CEO of Perodua, which is GLC UMW owned, YB Aminar should ask his big boss Najib to honour his promise to reduce car prices by 30%.
Already, Malaysians pay the highest car prices in the world. Aminar should ask Najib where is this 30% car price reduction Najib promised the rakyat 4 years ago.
By right, the Axia should not be raised by RM2774 but be reduced by RM7500 (30% price reduction promise)
The rakyat is suffering. It is up to the 2 famous CEOs, Aminar and Kenali from Proton to ask their big boss to honour the 30% price reduction promise.
After all, if national car company cannot approach Najib for this, how else are the local Jap car companies going to approach Jib for this?
Aishah also should ask Najib where is the 30% car price reduction? Tunggu apa? Tunggu jadi Sec General MITI is it? Or waiting for Tan Sri ship?
TESLA buyer…bijak ??
aik? Why not mention P1? P1 beat Toyota is it?
Proton sold 29,884 less cars in 2016 than 2015
Toyota sold 30,003 less cars in 2016 than 2015
Ouch! That hurts
Hahaha
That’s a disgrace to Proton, after 3 new model introduction in 2016.
The best part is P1 beat Toyota
Foreign partnership will infuse Proton with the funds, capabilities and technology in 2017.
The climate is perfect for Proton to overtake Perodua and reclaim the top spot. Also syabas to MAA for the transparency. We rakyat have a role to play – to remove our inferiority complex and have faith in our national marque. – Faiz Roslan CEng
Sell it off to China company!
Choose one: Geely, Greatwall, Chery, BYD, or Dongfeng!
Of course we have faith in our national marque. P2 is the market leader.
P1 is just a national embarrassment.
Dalam Mimpi CEng.
Surely request another 1.5 billion softloans again.
I am quite shocked at Proton’s figure of 72,000. I thought they said they had so many orders for Saga, like 20,000 orders and Persona also another 20,000 orders.
What happened? Betul ke got so many orders? Or is this another tactic like how the old CEO of Proton said they had so much of demand for Iriz that they had order backlog up to 1 year and Proton could not keep up with demand.
Betul ke Proton’s figures when they announce?
Bro kunta, sila insaf. This is proton we are talking about here. how can you ever believe whatever they say?
Kunta
They expect Spanco to take up the orders.But never took place.Cos gomen cutting down expenses.
So they said got “orders” but did not materialise.
So,faham tak?
You need rocket science?
Without the new saga vvt and persona vvt, proton total sales would be somewhere at 50,000 units. Believe me.
So the experts predictions of TIV 650,000 were WRONG by huge margin of 70,000. Tats why u should NEVER LISTEN TO EXPERTS..same with poperty market where r all he Experts and Gurus nw ahahaha
Suzuki sold 87 unit per year only?
well done DRB…
proton killed suzuki. You can read up the news posted in this site last year. http://paultan.org/2016/01/14/all-29-malaysian-suzuki-dealerships-are-now-proton-edar-outlets-sales-of-suzuki-brand-models-ended/
Without value perspective is like comparing apple to grapes or in this case Perodua to Mercedes.
Despite the slowdown;
1) Porsche sold 430 units
2) Jaguar sold 7 units
3) Land rover sold 246 units
4) Audi sold 950 units
5) BMW sold 9,000 units
6) Merc sold 12,017 units not to mention 7 units of Lambo.
In short, there are many rich people in M’sia. Some say they are getting richer by the day while others are saying they are immune to fluctuating of currencies.
Lastly, I want 2 thank these people by spending as it generate business for their sectors & contribute to our economy. Thank once again. Shalom & Cheers.
Well, the REHDA people will always beg to differ.
Bottom line is, the impact of the RM depreciation, uncertain job market and gst is hindering consumer spending.
From the sales figures, the rich are getting richer and the poor getting poorer.
Time to reduce car and property prices!!
There is a saying ‘what goes up must come down’.
I’m happy with this news. This means car companies will be desperate to secure sales of their cars. Plus, I’m car shopping for a D-segment sedan or SUV circa RM150-180k this year. I will only buy if a carmaker can give an excellent offer with good specs, free full servicing, low/no downpayment, etc.
Better just save your $.You can’t afford the car…No downpayment??
Why pay a big downpayment if automakers can offer high discounts and rebates? shop wisely lah. try using your grey matter more.
Fact: Cars so expensive, high living costs, low salary.. go figure. People don’t want to be in debt la. People are now switching to kapcais and scooters.
Yah man. Ubah gaya hidup.
Less cars, more public transport!
With MRT coming online, less pipu need to use car will naturally lead to less sales. This gips more power to consumer to choose and brands will have to up spec or lower prices to compete.
Time to implement scapping policy?
Flat growth….oxymoron
Think you got confused there. The author was referring to MAA 2017 market prediction which they forecast to increase by just 1.7% compared to 2016 figure (590k vs 580K). 1.7% growth is considered ‘flat growth’. He was not referring to 2016 vs 2015 performance. Whatever it is, MAA original forecast for 2016 is way off target and I believe their 2017 forecast (590K) will be off target too. If there is no improvement in our economy performance, the market will continue to decline again.
It is important to point out that out of Toyota’s total vehicle sales, about 19,000 were commercial vehicles, so like for like, brand for brand, Toyota sold half the amount of cars than rival Honda. Perhaps, just perhaps if the CH-R is spec’d & priced right, it may help to grow volume and market share. Time will tell.
Toyota suffer partly because they didn’t have a proper b-segment SUV which is trending quite strongly now. The CH-R should help them to capture some much need sales in that segment but it might not be enough to boost their ailing sales (overall), perhaps good enough to arrest further slide in 2017. Toyota problems in our market are more than skin deep. So far, they are too slow to embrace change, and when they did, they were doing it wrongly.
You know what, Proton could have been 4th if Toyota don’t mess up. But UMW deserved this, I don’t feel pity for it.
UMW has shares in perodua. So what. All in all UMW sold 250k cars (p2+Toyota+Lexus). It is therefore controlling more than 40% market share.
DRB comes close with honda+proton+Mitsubishi +audi
Malaysians love for automobiles? LOL.. you think I really wanted to buy a car? Public transport getting worse, sardine packed, messy routes and price hikes every now and then.
This is at a time when proton still expecting Malaysia to be its biggest supporter. In 5 years time there is possibility that bank giving 12 years loan to proton buyers. Or vios and honda city pushed to sell at 120k.
When the buying stop.. the killing begin..
Rich : Money getting smaller. investment drop… skip the property… beli kereta sahajalah.
Middle : Got money but no confident to buy anything now.
Poor : Tak larat nak beli.
So Merc, BMW, Volvo, Mini sales naik, the rest turun.
Seems to MAI is very pandai making pie charts and bar graphs…..Nothing else.
Stop making yourself stupid by producing stats…
Only this country has 9 years car loans…Yet, the spelling on the wall isn’t enough to tell you reasons?…
Close the entire department la.