Record car sales expected this year

http://biz.thestar.com.my/news/story.asp?file=/2010/7/21/business/6700110&sec=business
MAA optimistic due to 19.8% rise in the first six months

PETALING JAYA: The Malaysian Automotive Association (MAA) has revised upwards its 2010 total industry volume (TIV) forecast to 570,000 units from 550,000 units initially due to the stellar sales performance in the first half of the year.

The TIV in the first half grew 19.8% to 301,077 units compared with 251,305 units in the previous corresponding period.

The revised forecast, if achieved, means the Malaysian automotive industry is headed for a record-breaking year in terms of sales, surpassing its all-time high of 552,316 units in 2005.

MAA president Datuk Aishah Ahmad said the TIV growth in the second half was unlikely to be as strong as the first six months, and that the recent fuel price hike and increase in interest rates would have a minimal impact on the TIV.


»Our fuel prices are still the cheapest in the region« DATUK AISHAH AHMAD
She also said the impact on the TIV would be minimal if any further increase in fuel price and interest rates was marginal.

“A further increase in interest rates is possible. If the increase is 25 basis points the impact won’t be much,” she told a briefing yesterday.

“A further increase in fuel prices may not affect the overall TIV but car buyers may downsize to cheaper vehicles.

“Our fuel prices are still the cheapest in the region.”

Earlier this month, Bank Negara raised the overnight policy rates by 25 basis points to 2.75%.

Last week, the Government announced the increase of RON95 petrol price by five sen per litre to RM1.85, while RON97 would no longer be subsidised. The diesel prices rose by five sen per litre to RM1.75.

The multiplier effects of projects from the 10th Malaysia Plan would boost the economy and create demand for new vehicles, Aishah said, adding that the positive consumer sentiment was expected to continue owing to greater stability in the employment market.

She said outstanding orders carried over from the first half would be fulfilled in the second half of 2010.

Aishah also said the MAA had been lobbying the Government to extend incentives for not only hybrid and electric vehicles, but also all types of vehicles that cater to this segment.

For the first six months of 2010, total production volume increased by 27.8% to 293,783 compared with 229,842 units in the same period last year.

Aishah said the higher production volume was to cater to the improvement in sales of motor vehicles in the period.

The MAA also reported that motor vehicle sales for June rose 19.4% to 54,005 units from 45,245 in the same month last year as business conditions and consumer sentiment continued to be positive.

It said the sales increase was also due to buyers rushing to take delivery of their vehicles before the hike in interest rates.

On the outlook for July, MAA said the year-on-year growth would continue to expand, but the month-on-month volume would be maintained as outstanding orders had already been fulfilled.