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Better market conditions fuel car sales


February 23, 2008

Better market conditions fuel car sales

Low-cost, new model put Proton back on track

Salary increases, especially in the public sector, the launch of new vehicle models and improved consumer confidence were cited as key factors boosting car sales in Malaysia from 35,047 units last January to 45,817 units, up 31 percent.

"This is a very good start to the year and we expect the (positive) trend to spill over to February despite it being a shorter month," the Malaysian Automotive Association (MAA) President Datuk Aishah Ahmad was quoted as telling a local daily on Thursday at the launch of the association’s new office in Petaling Jaya.

International Trade and Industry Minister Datuk Rafidah Aziz, who launched the new office, said the impact of surging oil prices on domestic auto sales would be minimal.

"I cannot forecast what kind of impact (the high oil prices) would have. However, taking into account that salaries have increased and businesses are doing well, the impact should be minimal," she said.

"I do not think it would stop people from buying cars. People who can afford cars already would have factored in petrol prices and would have ways to spend wisely."

Rafidah said that any impact from rising oil prices would be cushioned by the government. "Because petrol prices are subsidised by the government, the impact should be small both at the pump level and at the consumer level, she said.

Meanwhile, Proton Holdings Berhad, parent company of national car maker Proton, announced third quarter pre-tax profit of RM11.030 million ($3.4 million), the company's second straight quarterly profit compared with a substantial pre-tax loss of RM272.012 million a year earlier.

Proton, which terminated alliance talks with German automaker Volkswagen late last year, booked the profit for the three months ended 31 December 2007 on the back of lower operating costs and sales of the new Persona 1.6-litre and Saga 1.3-litre models.

Proton chairman Datuk Mohammed Azlan Hashim said he expected improved results for the current financial year ending March 31, saying the group should perform well in the final quarter with the anticipated positive impact from export initiatives in China, Iran and Asean as well as a strong domestic order book.  

Third quarter sales jumped 51.2 per cent to RM1.45 billion from RM1.31 billion in the second quarter following a seven percent lift in volume to 36,784 units from 34,340 units previously, according to Proton managing director Syed Zainal Abidin Syed Mohamed Tahir.

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