Sales of premium vehicles were down in September compared with a year earlier, mainly due to customers holding back their purchases in anticipation of lower prices, according to industry observers and analysts.
One observer said that buyers had postponed purchases as there had been speculation that something relating to excise duty cuts would be announced in Budget 2013.
He noted that sales in the premium car segment in the first half of the year were still considered good despite the implementation of Bank Negara's responsible lending guidelines.
Under the central bank's guidelines, which came into effect since Jan 1, loans are now approved based on net income compared with gross income previously, in addition to more documentation.
“Purchasers from this segment have a lot of money and getting their loans approved were never a problem.
“They have the cash, it's just that many had adopted a wait-and-see approach,” said the observer.
Hong Leong Investment Bank in a recent report noted that the segment was “badly affected” in September.
“It was badly affected, with sales declining to 1,194 units (-9.6% year-on-year; -9.4% month-on-month. The main drag were the Mercedes Benz and Volvo.”
According to data from the Malaysian Automotive Association, 358 Mercedes Benz cars were sold last month compared with 515 units a year earlier, while sales of Lexus cars dipped to 108 units from 204 units previously. Fifty-five Volvo units were sold last month compared with 95 units previously.
Bucking the trend, however, were BMW cars with 504 units sold versus 420 units previously, and Audi cars, with 90 units sold compared with 52 units a year earlier.
Looking at the numbers, RHB Research analyst Alexander Chia admitted that sales within the premium car segment was “weak” last month.
“Premium vehicle sales in 2012 were weak year-on-year, especially considering that September 2011 was the Raya month,” he said.
“Sales were down due to consumers waiting for the outcome of Budget 2013,” Chia pointed out.
It had been speculated that the revised National Automotive Policy would include a policy that would address the gradual reduction of car prices in the country.
It was speculated that a downward revision of vehicle excise duty would be announced in Budget 2013.
However, last week, International Trade and Industry Minister Datuk Seri Mustapa Mohamed told the Dewan Rakyat that the Government had no plans for a downward revision of excise duty for imported and locally manufactured cars.
He had said that a sudden reduction in excise duty would significantly impact on the Government's revenue, estimated at RM7bil a year.
Going forward, Chia said he anticipated sales of premium cars to pick up in the remaining months of the year.
“We believe sales of premium vehicles will pick up, but it will depend on whether consumers will come back based on what the Government has announced which had dampened expectations of lower car prices next year.
“We expect premium car sales to be better than in September due to an element of pent-up demand within this segment.”
OSK Investment Research automotive analyst Ahmad Maghfur Usman said that sales within this segment could improve if there were new product launches to excite the market.
“With no new launches, people may not buy but rather choose to wait,” he said.