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Malaysia sales and production forecast
[Excerpt from AutoIntelligence Article]
New vehicle sales in Malaysia grew marginally by 0.5% y/y to 47,273 units during October, according to figures released by the Malaysian Automotive Association (MAA) and data compiled by IHS Markit. Of this total, passenger vehicle sales accounted for 42,364 units, up 1.7% y/y, while commercial vehicle (CV) sales stood at 4,909 units, down 8.6% y/y. In the year to date (YTD), total industry sales now stand at 502,244 units, an increase of 6.2% y/y. This total is split between passenger vehicle sales of 447,412 units, up 5.7% y/y, and CV sales of 54,832 units, up 11.2% y/y.
Meanwhile, vehicle production in the country surged 27.9% y/y to 51,769 units during October. Passenger vehicle output stood at 47,554 units in the month, up 29.8% y/y, while CV production grew by 10.0% y/y to 4,215 units. Vehicle production for the YTD is up 12.0% y/y at 472,267 units. Output of passenger vehicles is up 12.3% y/y at 436,859 units, while CV production has grown by 8.4% y/y to 35,408 units.
Outlook and implications
New vehicle sales in Malaysia returned to positive territory in October after witnessing a decline in September due to the end of the tax holiday period. The MAA attributed the growth in sales in October to a renewed availability of vehicles after stocks were depleted following the June-August period of zero-rated goods and services tax. On 1 September, the Malaysian government implemented a 10% sales tax on vehicles. The association expects the Malaysian new vehicle market to improve further in November, mainly thanks to new model launches and attractive year-end sales and promotion campaigns.
IHS Markit expects energy-efficient vehicles with affordable prices to be a key driver of new vehicle sales in the country in 2018. However, banks' strict hire-purchase loan approval conditions could dampen the market. We forecast that Malaysian sales of light vehicles, which include passenger vehicles and light commercial vehicles, will grow by 2.5% y/y to 587,235 units in 2018, mainly thanks to a low base of comparison and new model launches. Our data show that about 42 new/refreshed light vehicles will be launched in the country this year.
We also project that light-vehicle production in the country will grow by 2.9% y/y to 526,085 units this year. Growth in light-vehicle production in Malaysia during 2018 will come on the back of a recovery in domestic demand. Expansion of production will also be supported by a low base of comparison.
Furthermore, the Malaysian government is working on plans to promote the country as a production hub for energy-efficient vehicles as part of the latest New Automotive Policy. It aims to have 100,000 electric vehicles (EVs) and 2,000 electric buses on the country's road by 2030. The government also aims to have 125,000 EV charging stations in the country by that year. According to IHS Markit's forecasts, production of alternative-powertrain vehicles, which include EVs, hybrid, and plug-in hybrid electric vehicles, will expand to around 33,200 units in 2020, up from 13,067 units in 2017
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