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Robust demand for luxury cars [26-06-2011]  
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Demand for luxury vehicles in May continued to rise despite a decline in total industry volume (TIV) that month.

Sales of Volkswagen vehicles rose the most last month, jumping 325% to 455 units from 107 units a year earlier, according to data from the Malaysian Automotive Association (MAA).

For the five-month period ended May, sales of Volkswagen cars surged 341% to 2,057 units from 466 units a year earlier.

Within the luxury segment, sales of Mercedes Benz vehicles was the highest in May at 541 units, which was a 19% increase from 455 units a year earlier.

During the period under review, Mercedes Benz vehicle sales increased 13% to 2,278 units from 2,023 units in the previous corresponding period.

Sales of BMW vehicles meanwhile increased 38% to 443 units from 322 units a year earlier, while the German marque's five-month sales rose 30% to 2,029 units from 1,564 units in the previous corresponding period.

MAA president Datuk Aishah Ahmad said consumer sentiment for luxury cars was still strong, and that TIV, especially luxury makes, had been affected by the earthquake that hit Japan in March.

“The economy is still strong. Most of the luxury cars are from Europe and not affected by the Japanese tsunami. The demand (for luxury cars) is still there,” she said.

An analyst from a local bank-backed brokerage concurred.

“If not for the production disruption, TIV would not be affected and total vehicle sales in all segments would be registering good growth and not just the luxury segment.”

Total vehicle sales fell 9.5% in May to 46,045 units from 50,883 a year earlier due to a shortfall in production for the month of April.

This was a result of insufficient supply to cater to deliveries stemming from the impact of the earthquake and tsunami that hit Japan in March.

The drop in sales marked the biggest decline of the year since February when local vehicle sales fell to 40,387 units from 40,654 in January.

However, for the five-month period ended May, cumulative sales were still higher at 255,413 units from 247,110 in the previous corresponding period

Total vehicle production in May fell 20% to 38,909 units from 48,845 a year earlier.

Production for the five-month period fell 4.5% to 230,676 units from 241,658 in the previous corresponding period.

Analysts and industry observers are already revising downwards their TIV outlook for the year, in light of the disruption in vehicle production as a result of the Japanese disaster.

Earlier this year, MAA had forecast that TIV for 2011 would hit an all-time high of 618,000 units.

Total vehicle sales in Malaysia grew 13% to hit an all-time high of 605,156 units last year, surpassing the previous record of 552,316 units achieved in 2005.

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