Auto sector may miss TIV forecast as consumers reluctant to spend big

The industry must deliver more than 68,000 vehicles with just 2 weeks left to the new Year

By RAHIMI YUNUS / Pic By ISMAIL CEH RUS

The auto sector is about to fall short of its target forecast of 590,000 vehicles sold in 2017, and the second time in two years it has sold less than 600,000.

Based on calculations, the industry must deliver more than 68,000 vehicles with just two weeks left to the new year.

“It would be a tall order for the sector to achieve the total industry volume (TIV) forecast. However, the chance is still there, given the year-end promotion drive among car brands,” Malaysian Automotive Association (MAA) president Datuk Aishah Ahmad (picture) told The Malaysian Reserve yesterday.

Aishah believes the slowdown is not only exclusively for the automotive sector, citing housing as an example of having lacklustre growth this year.

“Some industries are affected this year, for example, the housing sector. Hence, the demands for commercial vehicles like lorries are also affected,” she explained.

In 2010, the sector met the TIV target for the first time with 605,156 units sold.

Last year, the industry sold 580,124 units, a 13% year-on-year (YoY) drop compared to 2015, marking its first decline after experiencing four years of growth YoY from 2012.

The highest TIV recorded was in 2015 with 666,674 units. This year, 466,603 units of passenger vehicles, or up 1.02%, has been delivered year-to-date (YTD) compare to the same period last year with 456,992.

It is the commercial vehicles segment that could be dragging the TIV number in 2017.

The segment has recorded a negative variance of 0.95% YTD, declined from 58,260 units YTD a year ago to 55,304 units for the same duration this year.

Latest data from MAA revealed that vehicle sales had increased 4.6% or 2,143 units in November 2017 to 49,184 units from 47,041 in the previous month, on the back of year-end promotions.

On a YTD basis, as of November 2017, the sector has registered 521,907 TIV, up 1.01% from 515,252 units delivered during the same period last year.

Meanwhile, production saw a 0.93% drop YTD to 463,993 units, from 497, 418 units in the same period in 2016.

Although the automotive sector saw exciting new launches this year, Aishah said consumers are reluctant to spend on big ticket items.

“Consumers have been very cautious in expenditure, and companies are thinking twice to invest in big-ticket items.

High purchase loan applications are also becoming more difficult to get approvals,” she added.

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