New Transportation market report from Business Monitor International: "Malaysia Autos Report Q1 2013"
Boston, MA -- (SBWIRE) -- 01/28/2013 -- Malaysian new vehicle sales continued to vary wildly from month to month during Q312. August new vehicle sales (of 51,823 units) were down by 12.9% year-on-year (y-o-y); however September sales (of 45,872 units) then recorded an increase of 3.3% y-o-y. All told, new vehicle sales were up by 1.8% over the Jan-Sep 2012 period, at 458,447 units, according to figures from the Malaysian Automotive Association (MAA). Breaking down the headline figure, passenger vehicle sales stood at 403,916 units, with commercial vehicle sales at 54,531. Passenger car sales accounted for 88% of the new Malaysian vehicle market, with commercial vehicles making up the remaining 12%.
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The main reason behind the fall in August sales was the expectation on the part of new car buyers that the 2013 Budget, unveiled in September 2012, would be supportive of the industry. In the event, there were no new incentives to directly help the industry announced as part of the Budget. However, there were a raft of spending measures, including significant pay rises for civil servants and greater spending on welfare, all of which should lend strong support to new car sales as we move into 2013. Adding further support to new car sales in 2013 is an expected strengthening in growth (BMI is forecasting 4.6% GDP growth in 2013, up from 3.8% in 2012) and the increased likelihood of a cut in interest rates at the November 2012 meeting of the central bank. Against this positive backdrop, BMI maintains its forecast of a 3% increase in new vehicle sales over 2012, rising to an almost 10% increase in new vehicles sales in 2013, to reach some 678,000 units.
This report also examines the long-term prospects for electric vehicle (EV) sales in Malaysia. At the present time, the green car market is very small, with less than 10,000 EVs on the road as of May 2012. However, should domestic production drive down prices due to economies of scale, we could see this segment growing at a faster rate during this period because of the low base it is starting from. In October 2012, the Malaysian government announced that there will be no extension to the current regime of import tax exemption for electric and hybrid vehicles beyond the end of 2013. This is to encourage the local production of greener cars. BMI believes that support from the pro-business government, together with the strong sales growth potential of the domestic auto market, should incentivise foreign automakers to increase their investments in the Malaysian green car segment. Given our long-held view that joint ventures (JVs) will become increasingly common in the EV space, we could well see a JV between a foreign company and local automaker Proton to jointly produce green cars in Malaysia.
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