Mercedes sees lower sales ending 5-year streak

The reduction in sales volume is due to external and supply-driven factors. The tax holiday gave a boost to the car market last year

by RAHIMI YUNUS/ pic by RAZAK GHAZALI

MERCEDES-BENZ Malaysia Sdn Bhd expects sales for the year to be lower year-on-year (YoY) thus ending the company’s five-year streak of record numbers of cars sold.

Its sales and marketing passenger cars VP Michael Jopp said the reduction in sales volume is due to external factors and partly due to the tax holiday last year.

“The volume is going to be less than last year’s mostly due to external factors and supply-driven factors, which, to some extent, are beyond our control. The tax holiday gave a boost to the car market last year and so, a YoY comparison is a little bit unfair,” Jopp told The Malaysian Reserve in an interview recently.

Jopp said the company sees a change in local customer behaviour due to global economic uncertainties.

“The customer sentiment has changed. I think people are more cautious and careful before they go into purchasing decisions,” he said.

Regardless, Jopp views the current situation is an aberration of long-term growth trend and will normalise in the future.

“I am confident this will neutralise over time,” Jopp said.

To date, Mercedes deliveries are below last year’s number, although the final quarter is expected to boost sales, contributed by improved supply situation.

“I am confident the fourth-quarter sales will end up significantly on a high note,” he added.

Mercedes achieved a fifth consecutive record year in 2018, with a total of 13,079 cars delivered, an increase of 9% or 1,034 units from 12,045 units recorded in 2017.

The German marque is leading the local premium segment at a 2.4% market share ahead of competitors like BMW Malaysia Sdn Bhd and Volvo Cars Malaysia Sdn Bhd.

Jopp, who assumed his position about three months ago from his previous tenure at Mercedes-Benz India, said the company is determined to be part of the local automotive industry’s transformation into electrification.

“The transformation we are seeing in the market is the shift from the combustion engine to plug-in and electric mobility. I think it is a very exciting opportunity to be part of that transformation and also to determine the way forward in that transformation,” he said.

Jopp said the company is looking at exporting to Asean countries where the brand does not have any local manufacturing facility, after having penetrated the Philippines market recently.

In August, the company announced it had started exporting the first complete knock-down lefthand drive Mercedes-Benz C-Class to the Philippines from its plant in Pekan, Pahang.

Jopp said the first batch of exports to the Philippines will be 100 cars, but the company is ready to do more.

In the next five years, the carmaker will focus on customers’ needs, while participating in the industry’s transformation.

“We will be customer-centric as much as possible and this is the direction going forward, as well as the transformation to an electric vehicle in the next five years,” he said.

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