MALAYSIAN vehicle sales are forecast to grow at a rate of 1% to reach 608,790 units in 2020, according to research firm Frost and Sullivan, with the expectation that the domestic economy will continue recording positive growth, thus driving consumer confidence.
Its associate partner and senior vice-president of mobility Vivek Vaidya noted that the key factors aiding the growth would be strong and growing consumer confidence and new model launches.
“New product launches have assumed more importance than ever for the growth of the Total Industry Volume (TIV). New models that offer smart connectivity features such as remote vehicle access through smartphone apps will get higher customer interest and will induce purchases,” he said.
However, Vaidya cautioned that the market could be dampened by global uncertainties such as the conflict between Iran and the US, which will impact long-term investment decisions. Another factor noted was the repeated postponement of the National Automotive Policy, which has created uncertainty among local industry players.
“Both of these will need to be overcome by positive consumer sentiments to maintain favourable growth,” he added, stating that factors expected to boost sales include increasing customer confidence aided by the stable political atmosphere and increase in infrastructure investments,” he added.
In 2019, vehicle demand in Malaysia registered a growth of 1% on the back of the strong performance of new model launches in the SUV segment, notably the Proton X70. Sales were cautious throughout the year, but saw an upsurge due to year-end promotions.
“The sales in the June to August period were significantly lower than the corresponding period in 2018, as this period in 2018 corresponded with tax breaks announced by the government that pushed up sales.
“However, despite relatively low performance in these three months, underlying positive sentiments ensured the 2019 sales ended 1% higher than in 2018,” said Vaidya, noting that vehicle sales in 2019 reached 549,232 units, backed by strong performance in the passenger vehicles segment along with the SUV segment.
The overall market continues to be more concentrated with the share of the top three players – Perodua, Proton, and Honda – increasing to 77.7%.
“Perodua continues to dominate the passenger vehicle segment with a 44.3% market share, followed by Proton in second place with 18%. Honda dropped to third position with 15.4% market share,” noted Vaidya.
The biggest market share gain in 2019 was registered by Proton, according to Vaidya, while Perodua is noted as having an “unassailable lead” over all the other players.
The commercial vehicle segment, on the other hand, had dipped in 2019, with the overall market concentration of the top five players decreasing. Vaidya noted that Toyota continued to lead the commercial vehicle segment at 31.4% on the back of strong sales of its Hilux model. – Jan 14, 2020