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New vehicle sales in Malaysia plunge during May
New vehicle sales in Malaysia plunge 15.0% y/y during May
IHS Markit perspective
- Implications: The decline in Malaysian new vehicle sales during May was largely due to a high base of comparison and consumers postponing their purchases to benefit from zero-rated goods and services tax from 1 June.
- Outlook: IHS Markit forecasts that Malaysian sales of light vehicles will grow by 3.7% year on year (y/y) to 594,243 units in 2018, mainly because of a low base of comparison and new model launches. We also expect light-vehicle production in the country to grow by 1.2% y/y to 517,751 units this year.
New vehicle sales in Malaysia declined by 15.0% y/y to 42,983 units in May, according to data released by the Malaysian Automotive Association (MAA). Of this total, passenger vehicle sales accounted for 40,221 units, down 10.9% y/y, while commercial vehicle (CV) sales stood at 2,762 units, down 49.4% y/y. By brand, Perodua's sales surged 27.7% y/y to 21,980 units during the month, giving it a market share of 51.1%, thanks to strong demand for the next-generation Perodua Myvi hatchback launched in November 2017, according to Motor Trader Online. As reported earlier, the vehicle had received 70,000 bookings as of the end of April and the automaker has so far delivered around 38,000 units. Perodua was followed by Honda in May with sales of 8,062 units, down 11.9% y/y. Proton came third during the month with sales of 4,091 units (down 43.0% y/y), followed by Nissan with 2,038 units (down 23.1% y/y) and Toyota with 2,027 units (down 66.6% y/y).
For the year to date (YTD), total industry sales stand at 225,212 units, a decrease of 3.8% y/y. This total is split between passenger vehicle sales of 203,299 units, down 3.4% y/y, and CV sales of 21,913 units, down 7.8% y/y.
Meanwhile, vehicle production in the country fell by 8.3% y/y to 43,529 units during May. Passenger vehicle output stood at 40,720 units in the month, down 7.5% y/y, while CV production plunged 18.3% y/y to 2,809 units. Vehicle production in the YTD is up 8.3% y/y at 241,582 units. Output of passenger vehicles is up by 8.7% y/y to 224,945 units, while CV production has grown 2.2% y/y to 16,637 units.
Outlook and implications
After witnessing 10.2% y/y growth in April to 47,089 units, new vehicle sales in Malaysia swung to negative territory in May, largely due to a high base of comparison. Furthermore, many consumers postponed their purchases in order to benefit from zero-rated goods and services tax (GST) effective from 1 June, which reduced vehicle prices. The MAA expects the market to grow in June, mainly thanks to the zero-rated GST, while sales should also be boosted by Hari Raya festive season promotional 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 3.7% y/y to 594,243 units in 2018, mainly because of a low base of comparison and new model launches. Our data show that about 60 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 1.2% y/y to 517,751 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.
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