The final month of the third quarter of 2017 saw a significant drop in sales by 20.8% compared to the Total Industry Volume (TIV) for August. The reduction of 10,739 units pushed the TIV for September down to 40,981 units, the lowest level this year. However, compared to the same month in 2016, the difference was not as great – 15% or 7,144 units.
This drop in volume has slowed the cumulative TIV which reached 425,711 units by the end of September. For the same 9-month period in 2016, the cumulative TIV had reached 418,277 units.
While that presents a positive point for the market this year, it is nevertheless quite far from what it should be if the TIV by year’s end is to reach the 590,000 units that the Malaysian Automotive Association (MAA) has given as a forecast for 2017. In order to achieve that, the cumulative volume should have reached 442,500 units by now.
To hit the forecasted number, the monthly sales volume for the remaining three months would need to be around 49,200 units. That’s not going to be easy as only in 4 months this year has the monthly TIV gone above 49,000 units.
On the production side, the combined output of the plants in Malaysia for September was 38,213 units, less than the 41,453 units produced in September 2016. Over the 9 months since the year started, 381,171 vehicles have been produced, 92% of which have been passenger vehicles (excluding pick-up trucks).
The MAA attributes the low sales numbers to the reduced number of working days as there have been many holidays. The final quarter has less holidays so longer working months may see higher sales volumes.
It doesn’t help that the banks are stringent about approving hire-purchase loan applications, which impacts new vehicle sales. This is a directive by Bank Negara Malaysia which doesn’t want the proportion of non-performing loans (NPLs) to become excessively high. NPLs are those loans where the borrowers fail to repay and are unhealthy for the economy.