"The local automotive market had remained subdued much of last year. For the second consecutive year, the TIV had contracted, reflecting perhaps a down-cycle of the market, which started in 2016", stated MAA in their official announcement yesterday.
The Passenger Vehicle (PV) segment increased by a mere 85 units or 0.02 percent at 514,679 units in 2017 against 2016. The Commercial Vehicle (CV) contracted by 3,536 units from 2016, resulting a lower TIV by 3,450 units or 0.6 percent in 2017 at 576,635 units compared to 580,085 recorded in 2016.
The official figures announced by MAA were not much different from what being mentioned by many OEMs during their recent announcements (and as projected in earlier posting). By brand, Perodua continued to be in number one position with 35.5 percent market share in the total market. Honda was at second position with 109,511 units and a market share of 19.0 percent, followed by Proton and Toyota with volume of 70,991 and 69,492 units respectively. Proton's market share was at 12.3 percent, just 0.02 percent higher than Toyota.
By segment, Perodua hold 39.8 percent share in PV segment, followed by Honda at 21.3 percent, Proton at 13.8 percent and Toyota at 9.3 percent respectively.
MAA is projecting a growth of 2.3 percent in 2018, with TIV is expected to be around 590,000 units. This is about 15,000 units lower from the earlier projection. The expected growth is attributed to the nation's higher projected economic growth of 5.0 to 5.5 percent.
The 13,365 units growth from 2017 is expected to be contributed equally by higher PV and CV sales at 2.3 and 2.5 percent respectively. PV market is expected to expand by 11,821 units and the CV segment is to increase by 1,544 units in 2018.
MAA also cited that the strict lending guidelines, the implementation of MFRS 9 and the prevailing high household debt ratio will remain as the biggest challenge that need to be faced by most of the players in the market.
There is also a potential hikes in the Overnight Policy Rate (OPR) by Bank Negara. The last review on OPR was about one and the half years ago.
Honda, in a separate announcement recently stated that their sales in 2017 records an all-time high. Honda Malaysia has been in the pole position among the non-national brands for 3 years in a row. Since its inception in 2003, Honda has sold 730,000 units in Malaysia.
For me, MAA's latest projection on 2018's TIV is much more realistic than the earlier 605,000 units. I believed market will not change much as long as there is no major shift in the loan policy imposed by the banks as more than 95 percent of Malaysian will continue to buy cars via Hire Purchase (HP) arrangement. If the loan continue to be difficult, than the growth of the TIV will be very much restricted.
