The segment is expected to drop 2.6% to 61,000 units in 2018 from 62,606 units in 2017

By RAHIMI YUNUS / Pic By ISMAIL CHE RUS

Dwindling commercial vehicle (CV) segment is expected to continue dragging down the sales of local vehicles, despite higher total industry volume (TIV) set in 2018, said Frost & Sullivan.

In its latest automotive market outlook, the industry consultant and market research firm has forecasted TIV to increase 2% to 601,000 units in 2018.

However, the CV segment is expected to contract for the fifth year since 2014, amid increasing construction projects.

The report noted the CV segment is to drop 2.6% to 61,000 units in 2018, from a forecast figure of 62,606 units last year.

The number has been declining year-on-year (YoY) from 2014 to 2017 with 78,124, 75,376, 65,579 and 62,606 units respectively.

“We do not know exactly why the CV is declining despite an increase in the infrastructure sector,” Frost & Sullivan senior VP of mobility Vivek Vaidya said during a media briefing in Kuala Lumpur yesterday.

“Usually, the CV volume will grow with increasing infrastructure investments. There are multiple reasons why this (declining trend) is happening,” Vaidya said.

He said this can happen when used CVs are imported under approved permit, or there is a possibility of unregistered imports that can skew the number as Frost & Sullivan relies on Malaysian Automotive Association (MAA) data.

“It could also be because there are players who are not members of MAA,” he explained.

In 2017, the report stated that excluding panel vans, all sub-segments — pickup, truck and others — witnessed a YoY decline compared to 2016’s figures.

According to the report, Toyota Motor Corp continued to lead the CV segment with a 35% market share, driven by strong sales of the Hilux model.

Overall, the report said the auto sector will remain positive in 2018, boosted by the rise in wages resulting from the economic recovery, strengthening of the ringgit, infrastructure development and national automotive policy update, among others.

“The strengthening of the ringgit is likely to reduce import costs of parts and complete built-up models, helping contribute to price stabilisation. Generally, the market has bottomed out and will continue to grow at 2%,” Vaidya said.

The passenger vehicle (PV) segment is predicted to grow 2.5% to 540,000 units this year, compared to 2.3% in 2017.

Conversely, high household debt, stringent loan approval and rising alternate mobility solutions such as e-hailing and public transportation do pose restraining risks to the industry.

Top three PV brands in 2017 were Perodua, Honda and Proton, while Toyota, Isuzu and Nissan dominated the CV segment.