On the next-gen vehicles, Frost & Sullivan believes electrification such as having an electric battery inside a car

by NUR HAZIQAH A MALEK / pic by HUSSEIN SHAHARUDDIN

FROST & Sullivan projects the auto-related industry is looking to the forthcoming National Automotive Policy (NAP) 2020 to provide a clear direction to transform itself in the new decade, as there is an urgent need for the local automotive industry to modernise itself.

Frost & Sullivan mobility senior VP and associate partner Vivek Vaidya said the policy due in the first quarter of this year is supposed to provide the direction as well as have clear provisions on autonomous vehicles trajectory in Malaysia.

“What I can guess based on the global trends when it comes to next-generation (next-gen) vehicles is, any electrification such as having an electric battery inside a car, which can either be hybrid or plug-in hybrid, or what can be called a series hybrid, so any of these can be considered as a next-gen vehicle.

“Eventually we will also see a fully self-driving car, but for now, we are more likely to see level two autonomy, so you’ll have adaptive cruise control and automatic slowdown upon detecting obstacles or objects in the direction it’s heading,” he said at the Frost & Sullivan’s presentation on Malaysian Automotive Industry outlook for 2020.

He believes industry players will rely on the NAP 2020 to guide and seamlessly transform themselves. “We don’t have a lot of information on the third national car at the moment, but chances are we’ll learn more when the NAP 2020 is announced. To show progress over the first two national car brands, the third is very likely to be an electric vehicle to prove the automotive industry’s progression and modernisation, thus paving the way for other industry players moving forward,” Vivek said.

Frost & Sullivan forecasts vehicle sales in 2020 will reach 608,790 units or a growth rate of 1% year-on-year (YoY), driven by consumer confidence, new model launches and trade diversion due to US-China trade war throughout the year.

The risk to the outlook comes from global uncertainties such as a potential US-Iran conflict which could impact long-term investment decisions as well as the increase in lending rates and low approval rates.

He said new product launches have assumed more importance for growth of the total industry volume (TIV).

“New models that offer smart connectivity features such as remote vehicle access through smartphone apps will get higher customer interest and induce purchase,” Vivek said.

He added that factors such as global headwinds and repeated postponement of the NAP have created uncertainty, both of which will need to be overcome by positive consumer sentiment to maintain the YoY growth in TIVs.

He further said factors that could help boost sales in the country include increasing customer confidence aided by the stable political atmosphere and an increase in infrastructure investments.

Vivek noted that the TIV sales figures in June to August 2019 were significantly lower than the corresponding period in 2018 as the period corresponded to tax breaks announced by the government, thus pushing up the sales.

“Despite a relatively low performance in the three months, underlying positive sentiments ensured TIV in 2019 ended 1% YoY higher than 2018,” he said.

Passenger vehicle sales reached 549,232 units in 2019, backed by a strong performance in the passenger vehicle segment and a resurgence of the SUV segment.

The MPV segment last year declined despite new model launches mainly due to cheaper SUVs with similar user experience.

Perusahaan Otomobil Kedua Sdn Bhd still dominates the passenger vehicle segment with a 44.3% market share, followed by Proton Holdings Bhd in second place with 18% market share and Honda Malaysia Sdn Bhd dropping to third with 15.4%.

Commercial vehicle sales dipped last year with 54,442 units sold, with the overall market concentration of the top five players decreasing while the panel van segment witnessing positive growth YoY.

Under the commercial vehicle market segment, Toyota Motor Corp continues to lead the segment with 31.4% market share, followed by Isuzu Malaysia Sdn Bhd, which has continued to lose its hold but still retaining second place with 16.1%, tailed by Mitsubishi Motors Malaysia Sdn Bhd at 10.5%.