Malaysia Sales Barely Beat Reduced Forecast in 2016

The Malaysian auto industry anticipates a slight recovery in vehicle sales this year after a disappointing 2016 saw deliveries fall 13% to 580,124 units from the record 666,677 set a a year earlier.

The December result, down 6.6% to 64,822 units, was just good enough to edge the full-year total past the Malaysian Automotive Assn.’s revised forecast of 580,000 units, but was well short of its start-of-the-year prediction of 650,000 sales.

The car and commercial-vehicle segments each saw 13% year-on-year declines, with sales of 514,545 and 65,579 units, respectively. Last year broke a 6-year streak of consecutive sales growth, MAA President Aishah Ahmad tells a news conference.

“The decline is due to many factors, such as the stringent hire-purchase loan approval by Bank Negara, the economic slowdown, lower consumer spending and cautious business sentiment,” Aishah notes in a report posted by the Malaysian Automotive Institute.

The local industry built 545,253 light vehicles during 2016, down 11.3% from prior-year’s 614,664. Car output was off 10.7% at 503,691 units and CV production fell 18.2% to 41,562.

The MAA expects a slow start to 2017, forecasting lower results in January than in December because heavy discounting pulled sales forward by a month.

It is calling for a 2017 turnover of 590,000 units, while industry analyst Frost & Sullivan predicts slightly lower full-year sales of 586,200.

Perodua retained car-sales leadership despite a 2.9% slip to 207,110 units. Honda fell 3.2% to 91,830 units but moved into second place ahead of Proton, which saw deliveries tumble 29.2% to 73,290. Toyota was No.4, down 31.7% at 44,586 units.

Perodua aims for 34% of Malaysia’s car market this year, setting a sales target of 202,000 units after finishing 2016 with a record 31.6% market share.

Honda Malaysia achieved the second-highest market share among its global operations after Indonesia in 2016, at 17.8%. The result made Honda Malaysia the first non-national marque to rank No.2 in Malaysian sales.

Proton has been losing market share for years and was down to just 14% last year from 17.3% in 2015.

An unnamed analyst tells The Star newspaper Proton should consider entering the SUV segment: “SUV is the fastest-growing segment in the world. A lot of companies are pushing for SUVs. Case in point is Honda – they had the CR-V and it was one of their best-selling models. They were smart to cash in on this model early.”

Meantime, the wait for struggling Proton to find an effective foreign partner continues, with hopes for an announcement in early February. Proton owner DRB-Hicom reportedly has narrowed the field to China’s Geely and French automakers PSA and Renault.

Mercedes-Benz Malaysia reported its sales rose 9% to a record 11,798 units, with President and CEO Claus Weidner saying Mercedes remains the country’s top premium car brand with a 2.4% market share.

Weidner says its Malaysian plant saw production rise 2.2% to 7,882 units.

BMW reported its highest-ever growth in the country in 2016, with sales rising 16% to 10,906 units. The total included 9,000 BMWs, 902 Minis and 1,004 motorcycles.

This year BMW will make Malaysia its regional export hub for the 3-Series, 5-Series and 7-Series to Vietnam and the Philippines in 2018. It plans to spend 10 million ringgit ($2.3 million) to raise local production capacity from 7,000 vehicles to more than 10,000.