KUALA LUMPUR: Malaysian automotive sales growth is expected to be flattish in 2011, with single-digit expansion seen for 2012 as fewer mass market models are launched in addition to stringent lending requirements by banks, according to market research company Frost & Sullivan.
Kavan Mukhtyar, Frost & Sullivan’s head of automotive and transportation practice said domestic automotive total industry volume (TIV) is expected to reach 612,000 units in 2012 compared to the estimated 605,000 units for 2011.
He added there will be limited models available in the sub-compact cars segment which are deemed entry level purchases.
“2011 was a volatile year for the global automotive sector due to unforeseen natural disasters and global economic uncertainty.
“Going forward, banks will be more cautious. Stringent loans and credit control are expected to affect the purchase of entry level vehicles in the A (sub-compact cars) and B segments,” Mukhtyar said during a press conference here yesterday.
The Malaysian Automotive Association will announce the full year TIV numbers for 2011 on Jan 18. In 2010, the TIV was 605,156 units, a 13% jump from a year earlier.
Mukhtyar said growth in 2012 will come from mid-sized sedans besides the premium and large sedans under the C and D segments. Under the C segment, Mukhtyar said notable
launches this year include the Hyundai Elantra and Honda Civic which are expected to complement strong sales of the Proton Saga.
The D segment which will see the unveiling of new models such as the Toyota Camry, Kia Optima and Volvo V60 this year, is expected post a 23% growth from a year earlier. The improvement stems from the recovery of the global automotive supply chain which was disrupted by the Japan earthquake and tsunami, as well as floods in Thailand last year.
These natural disasters had resulted in a 30.2% fall in sales within the D segment in 2011 as output of the Toyota Camry and Honda Accord were halted. The discontinuation of the Proton Perdana had also contributed to the decline, according to Mukhtyar.
Hybrid vehicles will also be closely watched. According to Mukhtyar, these vehicles will continue to see higher demand in 2012 due to the extended duty exemption for these vehicles, new launches and growing acceptance among consumers.
The price factor also plays a crucial role now that gasoline-fuelled vehicles are probably just 15% to 20% cheaper than hybrids of equivalent range.
“It makes financial sense for consumers to go for fuel-efficient hybrid vehicles,” said Mukhtyar who predicts hybrid vehicle sales to jump 60.9% to 13,400 units in 2012.
However, factors which may offset demand for the segment include maintenance and resale value concerns, apart from the cost of ownership and safety of the vehicles, according to Mukhtyar.
On whether national car manufacturer Proton Holdings Bhd could regain its pole position in the domestic market, Mukhtyar said it is possible for the company to recoup market share if it is able to deliver new products which are customer centric.
“One successful launch could make a big difference. It is model-sensitive,” Mukhtyar said.
Within the Malaysian passenger car market, Perusahaan Otomobil Kedua Sdn Bhd (Perodua) is believed to have retained its lead with a 34.3% market share in 2011 followed by Proton which registered a 29.1% share, according to him.
Among non-national brands, Toyota’s market share is believed to have declined 1.2 percentage points from 13.1% to 11.9% while Honda’s share is estimated to have dropped two percentage points from 8.2% to 6.2%.
“South Korean carmakers Kia and Hyundai are slowly gaining market share, supported by the launch of their new SUVs (sport utility vehicles) and sedans with attractive features and value for money,” Mukhtyar said.
To a question on whether the Malaysian automotive sector is saturated, he said the domestic market will still see growth, albeit, at a slower pace in the years ahead. He explained that the local sector will register a 5% to 6% growth annually in the next 10 years, unlike the 15% to 20% seen in the past.
Mukhtyar said the slower growth rates reflect the rise in disposable income among Malaysians as the country’s economic fortunes improve. For now, automotive sector observers will be keeping a close watch on the second revision of the National Automotive Policy (NAP) by the International Trade and Industry Ministry in the first half of this year.
It is believed that the revision aims improve the competitiveness of Malaysia as a regional automotive production centre and may include incentives to lure foreign investments into the domestic industry.
“The new revision to the NAP is likely to be announced only after the elections, (and as such) may have an impact only in 2013,” Mukhtyar said.
Kavan Mukhtyar, Frost & Sullivan’s head of automotive and transportation practice said domestic automotive total industry volume (TIV) is expected to reach 612,000 units in 2012 compared to the estimated 605,000 units for 2011.
He added there will be limited models available in the sub-compact cars segment which are deemed entry level purchases.
“2011 was a volatile year for the global automotive sector due to unforeseen natural disasters and global economic uncertainty.
“Going forward, banks will be more cautious. Stringent loans and credit control are expected to affect the purchase of entry level vehicles in the A (sub-compact cars) and B segments,” Mukhtyar said during a press conference here yesterday.
The Malaysian Automotive Association will announce the full year TIV numbers for 2011 on Jan 18. In 2010, the TIV was 605,156 units, a 13% jump from a year earlier.
Mukhtyar said growth in 2012 will come from mid-sized sedans besides the premium and large sedans under the C and D segments. Under the C segment, Mukhtyar said notable
launches this year include the Hyundai Elantra and Honda Civic which are expected to complement strong sales of the Proton Saga.
The D segment which will see the unveiling of new models such as the Toyota Camry, Kia Optima and Volvo V60 this year, is expected post a 23% growth from a year earlier. The improvement stems from the recovery of the global automotive supply chain which was disrupted by the Japan earthquake and tsunami, as well as floods in Thailand last year.
These natural disasters had resulted in a 30.2% fall in sales within the D segment in 2011 as output of the Toyota Camry and Honda Accord were halted. The discontinuation of the Proton Perdana had also contributed to the decline, according to Mukhtyar.
Hybrid vehicles will also be closely watched. According to Mukhtyar, these vehicles will continue to see higher demand in 2012 due to the extended duty exemption for these vehicles, new launches and growing acceptance among consumers.
The price factor also plays a crucial role now that gasoline-fuelled vehicles are probably just 15% to 20% cheaper than hybrids of equivalent range.
“It makes financial sense for consumers to go for fuel-efficient hybrid vehicles,” said Mukhtyar who predicts hybrid vehicle sales to jump 60.9% to 13,400 units in 2012.
However, factors which may offset demand for the segment include maintenance and resale value concerns, apart from the cost of ownership and safety of the vehicles, according to Mukhtyar.
On whether national car manufacturer Proton Holdings Bhd could regain its pole position in the domestic market, Mukhtyar said it is possible for the company to recoup market share if it is able to deliver new products which are customer centric.
“One successful launch could make a big difference. It is model-sensitive,” Mukhtyar said.
Within the Malaysian passenger car market, Perusahaan Otomobil Kedua Sdn Bhd (Perodua) is believed to have retained its lead with a 34.3% market share in 2011 followed by Proton which registered a 29.1% share, according to him.
Among non-national brands, Toyota’s market share is believed to have declined 1.2 percentage points from 13.1% to 11.9% while Honda’s share is estimated to have dropped two percentage points from 8.2% to 6.2%.
“South Korean carmakers Kia and Hyundai are slowly gaining market share, supported by the launch of their new SUVs (sport utility vehicles) and sedans with attractive features and value for money,” Mukhtyar said.
To a question on whether the Malaysian automotive sector is saturated, he said the domestic market will still see growth, albeit, at a slower pace in the years ahead. He explained that the local sector will register a 5% to 6% growth annually in the next 10 years, unlike the 15% to 20% seen in the past.
Mukhtyar said the slower growth rates reflect the rise in disposable income among Malaysians as the country’s economic fortunes improve. For now, automotive sector observers will be keeping a close watch on the second revision of the National Automotive Policy (NAP) by the International Trade and Industry Ministry in the first half of this year.
It is believed that the revision aims improve the competitiveness of Malaysia as a regional automotive production centre and may include incentives to lure foreign investments into the domestic industry.
“The new revision to the NAP is likely to be announced only after the elections, (and as such) may have an impact only in 2013,” Mukhtyar said.
