Malaysian Automakers Recalculate 2015 Sales Forecast

The Malaysian Automotive Institute is reviewing its 2015 sales forecast to take into account the impact of falling oil prices, a weaker ringgit against the U.S. dollar and the introduction of a goods and services tax.

The institute had predicted 2015 industry sales rising to 700,000 units in 2015 from an expected 670,000 in 2014.

“The forecast was done in October after analyzing the TIV (total industry volume) as at September 2014,” MAI CEO Madani Sahari says in a statement. He says at that time, the issue of low oil prices and depreciation of the ringgit were not considered.

“We are rerunning our TIV forecast modeling and taking into consideration the TIV for the last quarter of 2014 and other economic factors,” he says.

Reaction to the revised forecast generally is mixed. The Malaysian auto industry uses both the U.S. dollar and Japanese yen for its international transactions. When the ringgit depreciates against the dollar it appreciates against the yen.

The MAI will release its new forecast later this month.

Madani says he expects the energy-efficient vehicle (EEV) segment will continue to grow despite the falling oil prices.

“It is not just about fuel prices, but also about the technologies that EEV brings with it,” he says. “These technologies enhance comfort, safety and security. Furthermore, EEV also means lower fuel consumption. Regardless of the fuel-price fluctuation, consumers driving an EEV will always win in terms of lower cost of ownership.”

The April 1 introduction of the 6% GST replacing sales and service taxes has raised some questions among manufacturers.

“Some consumers will wait and see, while others will not,” Madani says. “I think this is a natural process. This situation is being closely monitored by the original equipment manufacturers and they will normally adjust their marketing plan accordingly.”

Madani previously predicted the new GST would result in a marginal fall in car prices.

Meantime, the MAI is predicting national automakers Perodua and Proton will raise their market share against foreign rivals in 2015.

“Based on the new models and the variant planning of the national car companies and the potential attractiveness of these models and variants, we forecast that the combined market share of Proton and Perodua will achieve 52% of the domestic total industry volume,” Madani says. Their current share is about 48%.