Malaysiaʼs LV Sales Slide Slows

The Malaysian Automotive Assn. predicts a June sales uptick because of the Hari Raya festive season marking the end of Ramadan, the Islamic holy month of fasting. It also sees new-model introductions helping dealerships.

Alan Harman, Correspondent

June 22, 2016

2 Min Read
BMW contract assembler Inokom feeling production slowdown
BMW contract assembler Inokom feeling production slowdown.

Malaysian light-vehicle sales plunged 12.8% year-on-year to 44,669 units in May, but a trade group says things are going to get better.

The result left year-to-date sales down 17.6% at 218,101 units.

The Malaysian Automotive Assn. says new-car sales in May fell 15.6% to 38,699 units. Commercial-vehicle deliveries were up 11.0% at 5,970 units.

With five months of the year completed, car sales were off 17.8% at 193,953 units and CV deliveries were off 16.4% at 24,148.

Amid steadily weak market demand, manufacturers have been reducing their output.

New-vehicle production in May fell 6.6% to 47,650 units. Car production was down 10% at 42,210 units, while the CV build was up 31.6% at 5,440.

After five months, LV output was down 19.7% to 222,035 units from 276,355. The new-car build fell 19.6% to 205,265 units from 255,227 and CV’s slid 20.6% to 16,770.

The MAA expects June sales volume will be better than this month’s because of the Hari Raya festive season marking the end of Ramadan, the Islamic holy month of fasting. It also sees dealerships helped by related sales campaigns and new-model introductions.

But Ram Rating Services is not so sure. Reacting to the latest figures, Ram is maintaining a negative outlook on the motor-vehicle sector, predicting industry volume will fall 10% this year.

“Poor consumer sentiment, compounded by the frontloading of sales last year, had resulted in the severe downtrend in (industrywide volume), the extent of which was deeper than we had initially expected,” Levin Lim, head of Consumer and Industrial Ratings for Ram, says in a statement.

Ram says consumer confidence is expected to remain weak this year because of the uncertain economic environment, the rising cost of living and tighter credit conditions.

While this will pose a severe drag on automotive sales, Ram sees a slight uptick in the second half as significant new models are introduced.

“At the same time, most industry players face slimmer margins from a higher cost structure and intense competition,” Lim says. “As such, Ram has maintained its negative outlook on the sector, premised on continued tough operating conditions.”

About the Author

Alan Harman

Correspondent, WardsAuto

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