The Malaysian Automotive Association (MAA) is maintaining its total industry volume (TIV) forecast at 640,000 units for 2013, mainly due to the possibility of further tightening of the hire purchase loans approval process by Bank Negara.
MAA president Datuk Aishah Ahmad said the impact of the loan approval process was greater on individuals from the lower-income bracket. “We believe the second half of 2013 would be a very challenging period for the (automotive) industry,” she said at a press conference yesterday.
Under Bank Negara’s responsible lending guidelines, which were implemented on Jan 1 last year, loans are now approved based on net income compared with gross income previously.
For the first half of 2013, TIV was up 4.1% to 313,488 units from 301,269 units a year earlier. Vehicle sales slipped for the second consecutive month in June, slipping 5.3% to 53,631 units from 56,650 units a year earlier.
Aishah, however, said aggressive sales campaigns and the introduction of new models at competitive prices in the second half of the year should continue to spur buying interest.
She also said Bank Negara’s overnight policy rate was expected to remain stable at its current level of 3%, boosting consumer confidence.
Separately, Aishah said she did not expect any reduction in vehicle excise duties by the Government any time soon.
“Excise duties contribute about RM7bil in total taxation, and with the Government trying to reduce its budget deficit, we do not expect any reduction in prices. We also do not expect any reduction of duties at this year’s budget.”
She said any reduction in prices was usually done by the automotive players themselves, especially during promotions, adding that the loss to profits as a result of the price cuts would be borne by the car companies.
“It would be difficult for industry players to reduce prices on their own without any policies introduced by the Government,” observed Aishah.
It had been reported that the Barisan Nasional Government would review the National Automotive Policy to reduce the price of cars by between 20% and 30% in stages until 2017.
Prime Minister Datuk Seri Najib Razak made the announcement in May in the coalition’s pledge for the 13th general election.
On expectations for this year’s budget, Aishah said she was hopeful that the excise duty exemption on hybrid cars below 2,000cc, a policy that ends this year, would be extended. She noted that since the implementation of the policy, sales of hybrid vehicles had increased tremendously.