KUALA LUMPUR: Local car distributors are firing on all cylinders to end the year on a high after a poor 2016, the industry’s first decline in six years.
The Malaysian Automotive Association president Datuk Aishah Ahmad said there are more new models introduced and industry players are more competitive to capture bigger market share.
“From the past years, December always had the highest sales of between 50,000 units and 60,000 units. Carmakers have given more incentives to get higher volume,” Aishah told NST Business in a telephone interview.
MAA expects a 1.7 per cent growth in total industry volume (TIV) to 590,000 units this year, comprising 522,000 passenger vehicles and 68,000 commercial vehicles. Last year, a total of 580,124 vehicles were sold.
In the January-November period, the TIV stood at 521,907 units, just 1.3 per cent better than the same period last year.
Aishah noted that sales had dropped 13 per cent last year from a record high of 666,674 units in 2015.
Based on the MAA data, TIV forecasts from 2010 to 2017 were 605,156 units, 600,123 units, 627,753 units, 655,793 units, 666,465 units, 666,674 units, 580,000 units and 590,000 units respectively.
Mazda vehicles and spare parts distributor Bermaz Auto Bhd (BAuto) is optimistic that the TIV will be around 590,000 units this year.
Its chief executive officer Datuk Seri Ben Yeoh Choon San said December will be a tough month without vast promotions.
“Most consumers prefer their vehicles to be registered early next year because they want to have a new-year registration.
“Consumers still have the perception if they register in new-year, the residual value would be much better,” Yeoh said when contacted.
He added that residual value should be based on the length of ownership of the car, but not the registration date.
Yeoh said some principals or franchise distributors would do more pre-registration towards year-end, providing huge discounts for customers.
“There are few carmakers doing this on annually. It is very clear that they still do it this year,” he said.
On the sector’s prospect next year, Yeoh said consumers confident and perception will play a major role in determining the market.
“With the ringgit strengthening a bit, and the global oil prices and commodity prices recovery, the domestic economic environment will be slightly better.
“Hence, it gives confidence to consumers’ purchasing power to change vehicles,” he said, adding that consumers will be looking at good deals and packages.
Yeoh said BAuto is on track to achieve its sales target of about 10,000 units this year. Still, this will be a slight contraction from what it had sold in 2016.
“The (expected) slight contraction is due to ageing model like the CX-5 sports utility vehicle (SUV). However, we launched the new generation CX-5 in October this year. Since then, our October and November sales have picked up,” he added.
The SUV is BAuto’s best-selling model. As of November this year, the company sold over 9,000 units including the Mazda2, Mazda3, Mazda5, Mazda6, Mazda MX5, CX-5, and CX-9.
Mercedes-Benz Malaysia Sdn Bhd (MBM) sales and marketing of passenger cars vice president Mark Raine said the German marque is upbeat on recording another good year.
“Overall, we are set to achieve all of our targets. In general, our target is to outgrow our previous sales results. We are looking ahead at another good year of 2017,” Raine said.
MBM’s 2016 sales increased nine per cent to 11,779 units from 10,845 units registered in 2015.
“It is our target to retain the market leadership in the premium segment, which we have defended very nicely.
“We are going ahead with big paces in terms of expanding our footprint in the Malaysian automotive market,” he said, adding that MBM has a 2.3 per cent share in the overall TIV.
Raine said MBM had invested over RM1 billion since its inception in 2003, mainly on an assembly plant in Pekan, Pahang, dealer networks and human capital development.
“We will continue to do so moving forward. We believe there is a great market potential for the premium brand here,” he added.
Raine is more confident of the sales prospect next year, and expects the passenger cars’ TIV to ease one per cent to 510,000 units this year from 515,000 units in 2016.
He said the sector is likely to grow between four per cent and five per cent next year, fuelled by better consumer sentiment and economic environment.