Posted on 06 Jan 2012
The automotive industry is expected to experience minimal to flattish growth in vehicle sales this year due to the global economic uncertainties and lack of fresh mass market model launches, say analysts.
Frost & Sullivan is projecting Malaysia's total industry volume (TIV) to increase 1.2% in 2012 to 612,000 units due to uncertainties in external markets and concerns on domestic loan approval rates.
Partner and head for automotive and transportation practice, Asia-Pacific, Kavan Mukhtyar, said approval rate for Malaysian passenger vehicle loan was forecast to decline to 50.3% in 2011 from 59% in 2009.
“Stringent loans and credit control are expected to affect the purchase of entry-level vehicles in the A (sub-compact cars) and B-segments (small and compact cars),” he said at a briefing yesterday.
Kavan: Stringent loans and credit control are expected to affect the purchase of entry-level vehicles in the A (sub-compact cars) and B-segments (small and compact cars).
He said sales in the A-segment would continue to shrink this year due to limited models offered, with an increasing trend of first-time buyers opting instead for B or C-segment (mid-sized sedan) vehicles.
“The pricing gap between A and B-segment vehicles is close and not substantial. For just a few ringgit extra, customers may choose to buy a vehicle that is a bit more expensive but also safer,” said Kavan, adding that the last A-segment model to be launched was the Perodua Viva Elite back in 2010.
Kavan said TIV in 2012 would be driven by vehicles in the C-segment, supported by promising growth in the D-segment (premium and large sedans).
He said the D-segment would be the fastest growing, increasing 23% year-on-year to 35,300 units this year, driven by recovery sales as the automotive supply chain returned to normalcy following the Japanese earthquake early last year and Thai floods recently.
Kavan said sales in the B-segment were likely to grow 2.2% to 98,800 units in 2012, driven by Perodua Myvi, Suzuki Swift and Ford Fiesta, adding that sales of the C-segment was expected to increase 3.8% to 238,300 units due to the launch of key new models such as Proton's P3-21A, Hyundai Elantra and Honda Civic.
He also said sales of hybrid vehicles would continue on a high growth path in 2012 due to the extended duty exemption, new models in the pipeline and growing customer acceptance.
“We predict sales of hybrids to increase 60.9% to 13,400 units. Gasoline-fuelled vehicles are probably just 15% to 20% cheaper than hybrids of equivalent range and it makes financial sense for consumers to go for fuel-efficient hybrid vehicles.”
Kavan also said the demand for multi-purpose vehicles was expected to decline 10.1% to 83,100 units this year as customers experienced model fatigue.
He added that sales of sports utility vehicles were likely to grow 11% to 25,900 units in 2012 due to a range of new models with attractive design and features.
Meanwhile, OSK Investment Research forecast TIV to grow 1.1% this year from a projected 592,537 units in 2011.
“We expect next year's (2012) TIV to grow by a subdued 1.1% on the back of a forecast gross domestic product (GDP) growth of 5.2%.”
OSK said although the linear correlation between TIV and GDP growth was strong, it believed the former's growth upside would be marginal as the replacement cycle for new vehicles that might give sales a boost had already peaked.
It also said the upcoming models might not create enough excitement to sufficiently spur TIV growth, adding that with deteriorating consumer sentiment and buyers maintaining a cautious front, spending power on big-ticket items would be affected.
Another analyst said she expected TIV growth to be flattish in 2012 due to the uncertain global economic outlook. “We feel that TIV will grow to between 606,000 and 608,000 units,” she said.
Full-year TIV figures for 2011 is expected to be announced later this month by the Malaysian Automotive Association (MAA). Last month, MAA president Datuk Aishah Ahmad said vehicle sales for 2011 was expected to reach 605,000 units.
