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New vehicle shipment

The year started with uncertainty in how the new car market would do and even the Malaysian Automotive Association (MAA) had forecast only a small increase of 1.7% in the Total Industry Volume (TIV). This increase would see 590,000 new vehicles being registered this year, 10,124 units more than in 2016. For this to be achieved, it would mean that new vehicle sales would have to be between 49,000 and 50,000 units each month and by mid-year, the TIV should be at least 295,000 units.

Only three of the six months recorded sales of over 49,000 units although each month’s TIV was higher than the same month in 2016. By the end of June, the cumulative TIV reached 284,461 units, 10,539 units below what it should be. However, when compared to the same 6-month period in 2016, the TIV in 2017 is 3.3% higher. While the sales of new passenger vehicles rose by 4.7%, there was a noticeable decline in commercial vehicles sales by 7.7% compared to the same period in 2016.

Monthly sales H1 2016 and 2017

The MPV segment returned to being the second largest segment this year
The MPV segment returned to being the second largest segment this year

The growth in passenger vehicles was largely contributed by the MPV segment which increased by 13,681 units or almost 50%. This was the second largest segment during the period, overtaking the SUV segment that declined. Because the Competition Commissioner makes it an offence to let the public know actual sales of new models each month, we can’t say which MPV models boosted the numbers.

However, Perodua states that its Alza is the leader in its segment and said that around 14,700 units were sold in the first six months of 2017. That’s 36% of the 41,091 MPVs registered between January and June this year. Other popular MPVs are the Proton Exora, Toyota Innova and Avanza, and the Nissan Serena S-Hybrid.

With even premium carmakers like Mercedes-Benz offering SUVs, the appeal of pick-ups for those with ‘active’ lifestyles may be diminishing

Goodyear tyresThe decline in the commercial vehicle (CV) segment was evident in all sub-segments except panel vans. In absolute numbers, the biggest drop was in pick-up sales which fell by 1,757 units (8.2%); however, in percentage terms, bus sales were down by 24.3% but this meant that only 83 less buses were sold in 2017 compared to 2016.

The decline in pick-up sales could be due to steadily increasing popularity in SUVs, especially the new generation of smaller ones, as well as new offerings from even premium brands like Mercedes-Benz.

Where in the past, people bought a pick-up for purely commercial purposes, they now buy it as an alternative personal vehicle. But not everyone enjoys driving a pick-up which is long and heavy and as more SUV choices are now available, there is probably a reduced preference for pick-ups.

The volume of vehicles produced at the various plants around the country was 255,318 units, 2.9% lower than the number produced in 2016. The decline was largely due to reduced production of commercial vehicles. The reduced output suggests that the carmakers were cautious in the light of uncertain market conditions, trying to avoid having excessive stock if sales slowed down significantly. Of course, for companies like Honda Malaysia, that would not be the worry since they are getting orders at a rate higher than the production plans they have made!

TIV 5 YEARS

Looking towards the second half of 2017, the MAA sees signs of positive developments which will enable the forecast of 590,000 units to be met, so there is no revision this time. The positive factors are based on forecasts by Bank Negara as well as economic growth globally. Consumer confidence also seems to be better but hopefully, the politicians will not make promises about reducing car prices again and disrupt sales. With a General Election due within 12 months, all sorts of promises will be made and car prices, being sensitive issues, have often been exploited by those trying to win extra votes. This happened before the last General Elections, resulting in a slowdown in sales. However, when people discovered that the promises were not going to be fulfilled, they bought their new vehicles and the surge made up for the slowdown.

The 590,000 units forecast for Malaysia in 2017 are the third highest TIV in the ASEAN region. Indonesia has the highest forecast of 1.1 million units while Thailand is second with 800,000 units. These are sales forecasts and actual production would be much higher since Thailand and Indonesia have huge factories which also export vehicles worldwide.

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[Chips Yap]

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