Malaysian car sales rise 20% in first half on road to record high

Kuala Lumpur: Malaysia's auto sales rose a stronger-than-expected 20 per cent in the first six months of 2010 and are expected to hit a record high this year despite higher interest rates and a fuel price hike, an industry group has said.

Sales in Southeast Asia's largest passenger car market rose to 301,077 vehicles in the January-June period, up from 251,305 a year earlier and the highest ever for a six-month period, the Malaysian Automotive Association said.

The association raised its full-year sales forecast to 570,000 vehicles, up from 550,000 earlier, citing strong consumer sentiment amid a robust economic recovery and greater stability in the job market.

Its president Aishah Ahmad said two interest rate hikes in the first half of the year and a recent fuel price increase had minimal impact on sales as the increases were marginal.

"There will still be a lot of interest in vehicle purchase. We expect a record year," she told reporters.

Compact carmaker Perodua retained its leadership with a market share of 31.5 per cent, followed by national carmaker Proton with a 26.6 per cent share. Japanese carmaker Toyota Motor Corp. secured 14.8 per cent of the market, followed by Honda Motor Co with 7.4 per cent and Nissan Motor Co with 5.8 per cent.

Recovery

Last year, auto sales fell 2 per cent to 536,905 vehicles. The highest ever sales were recorded in 2005 at 552,614 vehicles.

Malaysia's economy has rebounded from a recession in 2009 and is forecast to grow 6 per cent this year after expanding 10.1 per cent year-on-year in the first quarter, its fastest pace in a decade. Earlier in July the government cut fuel subsidies by about 3 per cent to curb its fiscal deficit and said more hikes are expected.

That raised the gasoline price to 1.85 ringgit (Dh2.12) a litre and diesel to 1.75 ringgit a litre.

Aishah said gasoline price is still the cheapest in the region despite the hike, compared to 4.12 ringgit in Thailand, 2.48 ringgit in Indonesia and 6.60 in the Philippines. Some customers may opt for smaller fuel-efficient cars but it is unlikely to hurt car sales if the fuel price hikes are gradual, she said. The association, which groups some 40 car manufacturers and distributors, projected sales to rise to 581,000 vehicles in 2011, and to surge to 618,000 by 2014.

Vendors happy

A merger of the two Malaysian car manufacturers Proton and Perodua into a single entity would be a step forward to boost the Malaysian automotive industry, the Proton Vendors Association (PVA) was quoted as saying by Malaysian National News Agency Bernama yesterday.

PVA president Dr Wan Mohammad Wan Embong said it would be timely for both national car manufacturers to look at the positive impact of consolidation as this could help the automotive industry to expand globally. "From our perspective, we need to look at the future rather than today because moving forward, the industry will definitely face great challenges," he told Bernama in an interview.

Wan said the use of common parts by Proton and Perodua could lead to economies of scale, bringing down the cost. Proton is expected to produce more than 200,000 cars during its current financial year (March 2010 to March 2011). Perodua is said to have the same capacity. A combined car builder could produce more than 500,000 cars in the medium term, Wan said. Perodua's cars are based on Daihatsu and Toyota designs and technology. Proton works very close with Mitsubishi and has acquired a majority in the Lotus car brand.

— Gulf News Report