Historically, in the Malaysian car market, March usually sees a jump in the Total Industry Volume (TIV). Even in some years when the Chinese New Year festival occurs in February and there is a lull in March after the big push the month before, the companies do their best to deliver as many vehicles as possible in March. This is because there are some companies that have their financial year ending on March 31, instead of December 31. So it’s their last chance to make their sales numbers as high as possible.
This year, the month’s TIV was 23.2% higher than that reported for February – 9,045 units more to reach almost 50,000 units. However, compared to the same month in 2017 (53,718 units), the TIV this year was 7% lower. The March TIV was made up of 44,489 passenger vehicles (excluding pick-up trucks), while commercial vehicles made up the remainder of 5,495 units.
This ends the first quarter of the year and the cumulative TIV has reached 135,140 units; a year ago, for the same period, it was 140,840 units or a 4% difference. Going by the Malaysian Automotive Association’s forecast of 590,000 units for this year, the TIV for each quarter should be about 147,500 units so there’s a deficit of 12,360 units. This means that in the coming 9 months, the monthly TIV of new vehicles sold would have to be around 51,000 units if the forecast is to be realised.
Interestingly, on the production side, the output in March 2018 compared to March 2017 was almost the same. Although less commercial vehicles were during the month produced this year, the reduction was offset by more passenger vehicles being produced than in March 2017.
With polling day for the 14th General Elections to be held in early May, it is likely that many people may choose to hold back their purchases of new vehicles unless there is an urgency. So far, other than one party saying that (if it wins), it would help first-timers to purchase vehicles, no other politicians have tried to win votes by saying that they will bring down car prices.
For the car companies, what is more important is the National Automotive Policy which is now underway. Their planning is usually 5 to 10 years ahead so they need to know what incentives or policies will be introduced in the medium-term and then decide what level of investment to make. Of course, timing is also important and if the policy is announced after they have made their long-term plan, then they may not do anything unless there are some very attractive incentives offered.