KUALA LUMPUR: Frost & Sullivan forecasts Malaysia's vehicle sales to reach about 609,700 units in 2019 at a growth rate of 1.4 per cent.
Associate partner and senior vice president of mobility Vivek Vaidya said the key factors likely to aid growth include growth in domestic consumption, growth in private investments, and new model launches.
"There are exciting product launches such as Perodua Aruz and Toyota Yaris that are coming up. Proton X70 launched in the last quarter is likely to gain momentum, which is likely to contribute to growth in 2019," he said in a statement.
Vaidya said the country's economy is expected to continue recording positive growth in 2019, driving consumer confidence throughout the year.
"Reduction in public infrastructure expenditure and weak external sector are some of the restraints in 2019 which will need to be overcomed by positive consumer sentiments to stay on the growth path.
"While persistent high household debt will continue to encourage cautious spending, expected wage growth is likely to provide the requisite counterweight,” he added.
Vaidya said vehicle demand in Malaysia went up by 4.2 per cent last year as rising consumer confidence and the three month tax holiday resulted in higher demand for passenger vehicles.
“Usually, after a tax break period, the volumes shrink in subsequent quarter but in 2018, strong consumer sentiments ensured volumes in the last quarter matched the last year figures to end the year on a positive note," he said.
The commercial vehicles segment also bucked the declining trend by registering an impressive 4.8 per cent growth in 2018
“Higher wages and the tax holiday led to improved consumer sentiment pushing up sales but were negated by restraints like accompanying inflationary pressures and stringent loan approvals," Vidya said.