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Malaysian vehicle sales may decline [10-01-2013]  
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Growth partnership outfit Frost & Sullivan expects Malaysia’s vehicle sales to decline 2.9% year-on-year (y-o-y) to 600,000 units this year, as buyers await details of the revised National Automotive Policy (NAP).

Its partner and head of the automotive and transportation practice for Asia Pacific, Kavan Mukhtyar, said on Wednesday that the marginal decline in total industry volume (TIV) was also due to concerns about the general election (GE), possible increase in fuel prices and continued tighter lending guidelines.

“The overall uncertainty surrounding the GE and the NAP are likely to restrain fresh demand as well as the significant replacement market,” he said.

In 2012, the TIV is likely to be 618,000 units, says Frost & Sullivan, growing 3% y-o-y due to pent-up demand, normalisation in the automative parts supply chain and launch of several new models.

Kavan said it would be a stagnant market for the automotive sector this year, despite his outlook for Malaysia’s gross domestic product (GDP) to maintain a 5% growth, mainly driven by strong performance in the construction, and oil and gas sectors.

“Both the construction and oil and gas sectors will drive the commercial vehicle segment to grow almost 9.9% y-o-y to 82,000 units this year, but the passenger vehicle segment is likely to fall 4.7% y-o-y to 518,000 units, as some consumers hold back on purchases of big-ticket items due to the uncertainties,” he said. “Sales for the A-segment for this year will continue to fall, at 15% y-o-y to 50,000 units, due to limited models offered and stricter credit control.”

He said automakers were likely to adopt a cautious approach in launching new models until the revised NAP was announced. New vehicle models expected to be launched this year included the Honda CR-V, Subaru Forester, Kia Rio, Kia Picanto, Kia Fort K3, Land Rover Range Rover, Honda Brio, Honda Accord and Toyota Corolla Altis, he noted.

The B-segment (small and compact cars) is likely to see a decline of 4% y-o-y to 100,000 units in 2013, while the C-segment (mid-sized sedan) will see a fall of 2% y-o-y to 225,000 units.

He said the multi-purpose vehicle (MPV) segment would see a drop in sales by 9% y-o-y to 90,000 units, as customers experienced model fatigue.

Kavan underlined several key factors that would likely impact sales demand this year, including reduction in taxes and duties on cars, increase in fuel prices and electricity tariffs, constant interest rates and continued stricter loan approvals.

“With the duty exemption for hybrid vehicles extended until Dec 31, 2013, hybrid vehicle sales are expected to almost double this year (35,000 units) as compared with 2012 (18,000 units),” he said.

“There is also likely to be an extended scope and incentives for green cars in the revised NAP to include low-emission conventional combustion engine cars and other alternative fuel vehicles, “ he added.

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