Following the expected lull in new vehicle sales during February, the Total Industry Volume (TIV) picked up again as March began. Apart from the steadily growing number of purchasers returning to the market after many had ‘bought ahead’ last year when there were meaningful savings during the GST-free months, March is also the month when many car companies end their financial year.
As such, there is usually a big push to close with the high numbers possible, so special deals are offered to just move the stocks out. This contributed to the 37% increase over February’s volume of 39,838 units to 54,776 units, as well as a 10% higher TIV than the same month in 2018.
50,000 passenger vehicles delivered
Increased sales in the passenger vehicle segment (excluding pick-ups) were the main contributor, with 50,101 units registered during the month. This was 13% higher than for the same month in 2018. Many of those units would have been of models which had been sitting in stockyards for months due to delays in the confirmation of incentives given to local assemblers. Only when the incentives were confirmed could the pricing of the vehicles be finalised and customs duties paid, before registration and delivery could take place.
The TIV for the first quarter of the year (Q1) reached 143,064 units, 6% above the TIV for Q1 in 2018. It should be remembered that market sentiment during the first half of 2018 was influenced by the impending General Elections, though not as drastically as the previous round of elections when talk of vehicle prices being lowered had dampened sales noticeably.
The MAA has forecast 600,000 units for this year which means a TIV of 150,000 units each quarter. The Q1 TIV falls a bit short but there are still three quarters to go and it’s still early to predict what the rest of the year will be like.
Waiting for the next NAP announcement
The industry players are obviously waiting to know about the new National Automotive Policy (NAP) which the Ministry of International Trade & Industry (MITI) says it will announce during Q2 2019. While Tun Dr. Mahathir insists that preference needs to be given to Malaysian brands, it would be hard to increase the preferential treatment for Malaysian brands because many foreign carmakers have made huge investments in the auto industry here. They have created thousands of jobs and certainly contributed to the advancement of the industry so discriminating against them would be showing ungratefulness.
It should also be remembered that 55 years ago, it was the Malaysian government that urged foreign carmakers to assemble in Malaysia (offering them incentives to do so, of course). There was no Malaysian car then and had the response been poor, Malaysia would not have been able to get an auto industry started.