The drop has more to do with the fact that it was a shorter working month due to the Chinese New Year holidays, which led to slower business activities, as well as a shortage in autoparts.
On top of that, bonuses, which tend to have an influence on when consumers decide to purchase big ticket items, weren't usually paid out so early in the year, the research house said in a report yesterday.
Car sales in January fell by 25 per cent to 40,948 units from the 54,781 units in the same period last year.
The drop was more drastic than analysts had expected.
The automotive industry blamed Bank Negara's tighter lending rules, which came into effect on January 1, as one of the reasons for the decline.
Under the new lending rules, banks have to calculate consumer loans based on net income rather than gross income. Proper documentation is crucial and additionally, the maximum tenure for car loans is now capped at nine years.
The Proton Dealers Association claimed that the new rules had led to loan approval rates in January falling to 30 per cent against the usual 45 per cent to 50 per cent.
"We see the drop in (industry volumes) as being weighed down more by the shorter work month in combination with the autoparts shortage sparked off by the Thai floods, rather than due to a higher rejection rate for car loans per se," said OSK analyst Ahmad Maghfur Usman.
He is expecting sales volumes to pick up by between 20 per cent and 25 per cent year-on-year in February as business activities normalise.
However, on a year-to-date basis, he is expecting volumes to continue to see single-digit negative growth, taking into consideration the possibility that loan applications may temporarily hit a snag due to the more stringent and longer loan approval process.