KUALA LUMPUR: The total industry volume (TIV) for the automotive industry is expected to grow 2.3% to 590,000 units in 2018 from 576,635 last year, in line with the nation’s higher projected economic growth of five to 5.5%.
Malaysian Automotive Association (MAA) president Datuk Aishah Ahmad said this was supported by global growth, which is expected to increase from 3.6% in 2017 to 3.7% in this year based on the International Monetary Fund’s forecast.
“However, the continuation of strict lending guidelines for hire purchase loans by financial institutions will remain one of the biggest challenges for the industry moving forward,” she told a press conference on the industry’s Market Review for 2017 and Outlook for 2018 here, today.
Passenger vehicles TIV is expected to grow 2.3% from 514,679 units last year to 526,500 in 2018, while commercial vehicles would see a rise of 2.5% to 63,500 this year from 61,956 units in 2017.
Aishah said the local automotive market remained subdued in 2017 despite the economy’s recovery and aggressive promotional campaigns undertaken by MAA members.
“TIV contracted for the second consecutive year, down 0.6% from 580,085 units in 2016, reflecting a down-cycle of the market which started in 2016.
“Sales remained flat in 2017, contributing to inflationary pressures affecting disposable income resulting in cautious consumer spending,” she said.
The MAA president also said the ringgit’s improved performance would help industry players obtain higher margins, especially for transactions in the US dollar and Japanese yen.
“However, if they are trading in euro and pound sterling, they are losing out because the ringgit is weaker against these currencies,” she said.
Commenting on higher fuel prices, Aishah opined that the impact would be minimal as there are more fuel and energy efficient vehicles being produced.
On expectations for the National Automotive Policy 2018 review, which is expected to be announced in the middle of this year, she said the details have not been discussed with MAA as it is still at a preliminary stage.
“I think most people will wait and see, especially with the upcoming general elections.
“We hope the announcement will boost the industry and for us to be able to expand sales by focusing on exports,” she added.
For 2019 to 2022, MAA forecast TIV growth to be at 2.0%, 2.1%, 2.2% and 2.3%, respectively.
