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 Business

Frost and Sullivan forecasts 2019 vehicle sales to grow to 609,000

17th January, 2019

KUALA LUMPUR: Business consulting firm Frost and Sullivan forecasts Malaysia’s vehicle sales to grow 1.4 per cent this year to 609,700 units driven by continuous economic growth and consumer confidence.

Associate partner and senior vice president of mobility Vivek Vaidya said key factors aiding growth in the Malaysian automotive market this year include growth in domestic consumption and private investment as well as new model launches.

“There are exciting product launches such as Perodua Aruz and Toyota Yaris while Proton X70 launched in the fourth quarter of last year is likely to gain momentum, which is likely to contribute to growth in 2019,” he told reporters at a briefing on Malaysia’s Automotive Market Outlook 2019 here Wednesday.

However, he said a reduction in public infrastructure spending and a weak external sector would be some of the restraints this year which need to be overcome by positive consumer sentiments to enable the industry to stay on the growth path.

“While persistently high household debt will continue to encourage cautious spending, the expected wage growth is likely to provide the requisite counterweight,” he added.

He said 2018 vehicle sales are expected to go up by 4.2 per cent to 601,300 units boosted by rising consumer confidence and a three-month tax holiday following the abolishment of the goods and services tax in June.

“Usually, after a tax break period, the volumes shrink in subsequent quarters but in 2018, strong consumer sentiments ensured the fourth quarter volumes matched the previous year’s figures to end the year on a positive note,” he said.

Nevertheless, he said inflationary pressure and stringent loan approvals continued to restrain vehicles sales. Vaidya said passenger vehicles sales reached approximately 536,371 units last year backed by strong demand in the passenger vehicle segment and resurgence in the sports utility vehicle (SUV) segment at the cost of the multipurpose vehicle (MPV) segment.

“The MPV segment declined despite new model launches last year and the trend is likely to continue this year with more SUV launches expected,” he said.

He added that the domestic passenger vehicle market continued to be concentrated with the top three carmakers – Perodua, Honda and Proton – making up 73.4 per cent of the market share.

Meanwhile, he said the commercial vehicle segment also bucked the declining trend to register an impressive 4.8 per cent growth last year.

He said the commercial vehicle segment’s growth was aided by strong performance in the pick-up as well as truck segments.

“Transport companies seem to have taken advantage of the tax holiday to modernise their fleets by purchasing new trucks,” he said.

He added that unlike the passenger vehicle segment, market concentration in the commercial vehicle segment decreased last year with the top three brands – Toyota, Isuzu and Ford – only commanding 59.8 per cent of the market share, down from 64 per cent a year earlier. –Bernama

   
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