Malaysia’s May Sales Dip; Proton, Suzuki Do R&D Deal

Malaysia’s new-vehicle sales fell 8.4% in May to 51,254 units amid uncertainty over the economic outlook and the impact of the recently introduced goods and services tax.

Malaysian Automotive Assn. figures show the May result left year-to-date deliveries down 3.6% at 264,747 units. But it was up 13.4%, or 6,073 units, from April’s post-GST (sales tax) slump when many purchases were pushed forward a month to take advantage of pre-GST marketing campaigns.

The MAA says it expects the June volume to be even higher as sales campaigns linked to the Hari Raya festive season boost customer traffic.

Celebrated by Muslims, Hari Raya signifies the end of Ramadan, the Islamic holy month of dawn-to-sunset fasting.

The May result saw car sales drop 8.0% to 45,874 units for a 5-month total down 3.7% at 235,838. The much smaller commercial-vehicle segment fell 11.5% to 5,380 units for a year-to-date total off 2.7% at 28,909.

In line with the sales results, production fell 6.3% in May to 51,024 units, but after five months Malaysia’s output remained up 4.1% at 276,355.

The car build fell 6.5% in May to 46,889 units for a 5-month total up 4.6% at 255,227.

Truck production eased 3.3% in May to 4,135 units for a 5-month total of 21,128 units, down 1.6% from a year-ago 21,480.

Meantime, amid steady sales gains by foreign automakers, Malaysian manufacturer and market leader Perodua is looking to end its rivalry with domestic competitor Proton to increase their combined market share.

Perodua President and CEO Aminar Rashid Salleh says his company holds about a 30% market share. Proton's share is reported at 17%. He tells the Bernama government news agency the national automakers should increase their combined share to 60%.

“So, if we get to defend (our market share) and Proton is able to grow its share, then it will be good to the industry,” Aminar says.

The Perodua CEO was reacting to Proton Chairman Mahathir Mohamad’s call for Proton to challenge Perodua in the compact-car market after its linking up with Japanese automaker Suzuki.

Proton and parent company DRB-Hicom have signed a memorandum of understanding and a license agreement with Suzuki to form a long-term strategic partnership, with the possibility of developing a new small car. The agreement would give Proton access to Suzuki’s models, platforms, powertrain and automotive technology.

Aminar says Perodua hopes his company and Proton could complement each other rather than compete.

But International Trade and Industry Minister Mustapa Mohamed is looking to the Proton-Suzuki alliance to invigorate the Malaysian manufacturer.

Mustapa says Proton, with no history of compact-car R&D, could use Suzuki’s expertise.

“Suzuki has wide experience in India, where it dominates the compact-car market,” Bernama quotes him as saying.

Proton says in a statement the Suzuki collaboration will give it specific technical assistance with the products and scope selected.

“A collaborative (effort) like this is common in the automotive industry where car companies work together to reduce cost, optimize operations and realize market potentials,” Proton CEO Harith Abdullah says. “The first phase of the project is scheduled to start production in the next 16 months and the production will take place at the Proton Tanjung Malim plant.”