New vehicle sales in Malaysia surge in January, production plunges
New vehicle sales in Malaysia grew 8.7% y/y to 48,450 units during January, according to figures released by the Malaysian Automotive Association (MAA) and data compiled by IHS Markit. Of this total, passenger vehicle sales accounted for 44,264 units, up 10.8% y/y, while commercial vehicle (CV) sales stood at 4,186 units, down 8.9% y/y.
Vehicle production in Malaysia plunged 19.4% y/y to 54,818 units during January. Passenger vehicle output stood at 51,137 units in the month, down 20.5% y/y, while CV production grew marginally by 0.3% y/y to 3,681 units.
Outlook and implications
The growth in the Malaysian new vehicle market during January can be attributed to strong demand for new models launched last year. The MAA also attributed the growth during the month to the clearance of 2018 stocks and attractive sales promotion campaigns from automakers. The association expects the Malaysian new vehicle market to be lower in February than in January, mainly due to a shorter working month as a result of the Chinese New Year holidays. Meanwhile, the decline in vehicle production in the country during January was largely due to a high base of comparison. During January 2018, vehicle production in Malaysia had surged 49.3% y/y to 68,002 units.
Automakers have announced their targets for 2019. They intend to fight for control of the local market by bringing out new models and expanding their dealership networks. Our forecasts show that about 60 new or refreshed models will be launched in the country this year.
IHS Markit expects Malaysian sales of light vehicles, which include passenger vehicles and light commercial vehicles, to grow by 4.5% y/y to 623,000 units in 2019. Many positive factors will drive the Malaysian vehicle market this year, such as a stable economy, new model launches from leading OEMs, and the implementation of the National Automotive Policy (NAP), according to IHS Markit's Malaysian light-vehicle sales forecasting analyst Mayuree Chaiyuthanaporn. The Malaysian GDP growth rate is expected to remain above 4%, driven by the new 2019 government budget, which includes higher-than-expected tax refunds and new subsidies for lower-income households, which will support private spending. There will be strong demand for new models launched by the leading OEMs. Furthermore, the Malaysian government is expected to implement the updated version of the NAP in 2019. This is expected to offer more benefits to consumers.
However, there are some concerning factors that may dampen market growth, such as currency uncertainty and high inflation, according to Chaiyuthanaporn. The Malaysian ringgit will remain under pressure as the US Federal Reserve is expected to implement more interest-rate rises this year. Furthermore, inflation will strengthen marginally in 2019, driven by the effects of the ringgit depreciation, fuel subsidies, and the reintroduction of sales and services tax.
We also project that Malaysian light-vehicle production will grow by 3.6% y/y in 2019 to 558,000 units, mainly on the back of the new government's political reforms, the new tax regime implemented in 2018, and continued expansion of demand for light vehicles in the country, according to Jessada Thongpak, IHS Markit senior analyst for Association of Southeast Asian Nations (ASEAN) light-vehicle forecasting.
The government is working on plans to promote Malaysia as a production hub for energy-efficient vehicles as part of the latest NAP. 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. In May 2015, the government announced the National Electric Mobility Blueprint. The key objective of the blueprint is to position Malaysia as a progressive nation in low-carbon mobility and environmental sustainability by increasing the adoption of EVs, strengthening electric mobility ecosystems and charging infrastructure, and accelerating the localisation of electric mobility technology, according to the ministry. These moves are in line with the government's efforts to improve air quality in the country by bringing down particulate levels and to reduce dependence on fossil fuels. 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 27,700 units in 2020, up from 16,513 units in 2018.
Read more articles like this one. Get a free trial to AutoIntelligence Daily
- US DOT releases latest version of federal guidelines for automated vehicles
- Vehicle production in Turkey declines 6% y/y during 2019
- South Korea to increase e-mobility subsidy budget for 2020
- Tesla plans production of up to 500,000 upa at new German plant
- Automotive Industry Leaders Join IHS Markit in Key roles
- CES 2020: Technology drives architecture transformation in the vehicle, bringing disruption and opportunity
- Ola signs up over 10,000 drivers ahead of London launch
- EU passenger car registrations grow 4.9% y/y during November – ACEA
US DOT releases latest version of federal guidelines for automated vehicles. Read more: https://t.co/NIGhbFRwLp