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15 October2009

Malaysia: Car market seen hitting 500,000 units in 2009

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Malaysia’s automotive analysts are mostly optimistic that 2009 car sales would meet or surpass the Malaysian Automotive Association’s (MAA) full year forecast of 500,000 units, reported local business daily the StarBiz.

An analyst from a local bank-backed brokerage said the 500,000-mark was achievable despite a tendency for vehicle sales to slow down in the final quarter of the year – regardless of an economic downturn or not.

For the first eight months of 2009, vehicle sales stood at 351,558 units compared with 379,184 units sold during the same period in 2008. The MAA will be announcing vehicle sales for September later this month.

“You would need to sell another 148,442 units in the last four months of the year to reach 500,000 units. That’s an average of about 37,110 units a month,” the analyst told StarBiz.

“Monthly vehicle sales were lowest in February at 36,675 units, due to poor consumer confidence as a result of the global economic downturn and because it was the shortest month. Sales since have been over 40,000 units a month so the MAA forecast is achievable,” he added.

In its half-year briefing in July, the MAA revised upwards its total industry volume (TIV) forecast for this year to 500,000 vehicles from 480,000 due to improved economic conditions and consumer sentiment.

At 500,000 vehicles, the TIV is down 9 percent from the 548,115 units sold in 2008. OSK Research auto analyst Ahmad Maghfur Usman also said MAA’s full-year target was “achiveable for sure,” adding that TIV in the fourth quarter was expected to ease.

“Most (buyers) would prefer registering their vehicle purchases towards next year. Some are also more keen to wait for new models as it has been rather quiet lately,” he said.

On whether he expected anything from Budget 2010, to be tabled next week, Maghfur said: “I expect a more liberalised auto sector as the Government tries to lure more value-added investments.

“Nonetheless, I don’t expect any change in the tax structure. Even if there were, it would be rather minimal; otherwise it would disrupt the secondary market.”

An AmResearch analyst who monitors the automotive sector said he was maintaining his initial forecast of a 14 percent drop in the TIV to 479,400 units for 2009.

“We’re still maintaining (the forecast) for now as risk leans more to the upside. Fourth quarter sales typically weaken as consumers hold back purchases for new year registrations.

“Perodua’s MPV (multipurpose vehicle) launch in November could provide a boost, but meaningful registration numbers (not bookings) are only expected probably from December or January,” he said.

The analyst said sales for September were likely to be weak or flat compared with August.

“Sales typically weaken towards the end of the year. August probably marked the start (of the slowdown). September this year also coincided with the Hari Raya festivities, (meaning) a shorter working month.”

He added that sales in September 2009 were unlikely to surpass the 50,729 units sold in September 2008.

“September last year was strong, being the month prior to Hari Raya when there were a lot of promotions.”


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