By Khairie Hisyam
Malaysian automotive sales are tipped to slow this year on weak sentiment and tight financing rules after a strong end to 2015 that saw national marques claw back some overall market share from non-nationals.
In a research report today, Maybank Research said it expects an overhang in auto sales in the first quarter of 2016 (1Q16) due to weak consumer sentiment and tighter hire purchase financing guidelines that had seen loan rejection rates rise.
“Higher costs of living coupled with the moderation in economic growth are factors that will continue to weigh on consumer sentiment especially for purchases of big ticket items (ie property and cars),” wrote Maybank analyst Ivan Yap. “As such we expect 2016 total industry volume (TIV) year-on-year to 645,000 units.”
Malaysian auto sector TIV surged 23.7% month-on-month to 68,401 units in December 2015. The surge is attributed to consumers front-loading their purchases before price hikes in January.
This brought full-year TIV to 666,674 units, a marginal increase from a record-high TIV of 665,675 units seen in 2014.
Of total industry sales, 88.7% are passenger vehicles while another 11.3% are commercial.
Most carmakers saw sales growth in 2015 despite challenging conditions that have stiffened competition and cut into margins. Notable exceptions are Proton, whose sales volume dropped 11.8% year-on-year; Hyundai, down 38.8% year-on-year; and Volkswagen, down 28.2% year-on-year.
Sales volume by national carmakers Proton and Perodua made up 47.3% of 2015 TIV, a slight increase from 46.8% in 2014, which was the first time collective non-national TIV overtook national marques in terms of total market share.
Non-nationals saw collective TIV decline by 0.6% year-on-year in 2015 while nationals grew sales by 0.6%, the latter driven by Perodua’s 9.1% sales volume growth as Proton saw its sales volume dip.
Weakening sector conditions are also expected to intensify competition among auto players, shrinking margins and profitability, said the research house.
Apart from tightening lending rules, generally weak sentiment is exacerbated by the one-off inflation from the implementation of the goods and services tax from April 1, 2015, which added to rising living costs.
You must be logged in to post a comment.