Car sales likely to slow down
PETALING JAYA: Despite a positive start to the year, experts are forecasting a slowdown in the automotive market’s total industry volume (TIV) in the coming months.

The initial momentum seen in the first four months of the year (4M24), driven by a surge in consumer demand and festive season purchases, is expected to taper off as the year progresses.

To note, in 2023, the Malaysian automotive industry saw an all-time high TIV of close to 800,000 units.

TIV for 4M24 grew by 8% to 260,236 units from the 240,417 units registered in the corresponding period in 2023.

TA Research analyst Angeline Chin said the 4M24 TIV performance was above expectations, attributing the strong April numbers to the Hari Raya festive season, which typically boosts sales.

“April usually sees a spike due to festive purchases and this year was no different. However, while the month of May may see a slight increase, we expect sales to slow moving forward,” she told StarBiz.

Chin believes some sales from April will flow into May due to pending deliveries.

“We’re still keeping our TIV forecast at 650,000 units for 2024, as we do anticipate a slowdown as consumers adopt a wait-and-see approach regarding electric vehicles (EVs),” she added.

She highlighted that while the price of EVs was becoming more competitive, many consumers were still hesitant to make a purchase.

However, she noted that many consumers were still on a wait-and-see mode, particularly as there have been numerous talks about EV prices dropping over the past few months.

Chin also said that the market’s performance depended significantly on new model launches.

“We expect to see some new EV models coming in the second half of the year, which could influence the market dynamics,” she said.

Similarly, veteran automotive industry journalist Yamin Vong pointed out that last year’s TIV of nearly 800,000 units was unprecedented.

“Last year’s TIV of almost 800,000 units was completely out of the blue and this was also observed in Thailand, where sales spiked to a record high,” he said.

Vong expects TIV to settle back to the pre-pandemic levels of about 600,000 units, boosted by the influx of new cars from China.

Meanwhile, an industry observer said that the 4M24 TIV held up due to pending deliveries and strong performance by key players like Perusahaan Otomobil Kedua Sdn Bhd (Perodua), which accounts for a significant portion of the market.

He added that Perodua’s production had increased to meet demand, contributing to the overall TIV.

To note, Perodua sold a record 330,325 units in 2023, up 17.1% from its previous record of 282,019 units registered in 2022.

This year, the local automaker targets to maintain sales at the 330,000-unit level.

Looking ahead, the industry observer said while there might be a slight softening in TIV compared to last year, it would not be substantial.

“It’s hard to beat last year’s numbers but any softening will be mild. The job market is still strong and there is still pent-up demand,” he said.

Meanwhile, in April 2024, a total of 53,253 passenger vehicles were sold, an increase of 25% from the 42,587 units sold a year earlier, while sales of commercial vehicles fell 9% year-on-year (y-o-y) to 4,738 units from 5,215 units.

In 4M24, passenger vehicle sales grew by 11% y-o-y to 238,247 units while commercial vehicle sales fell 15% to 21,989 units.

When asked if this decline in commercial vehicle sales indicated a broader economic slowdown, Chin said commercial vehicle sales performed exceptionally well in 2021 and 2022.

“What we’re seeing now is a normalisation period (of commercial vehicle sales),” she said.

Meanwhile, Vong said the decline in commercial vehicle sales was also evident in logistics depots, where many prime movers and trailers were stationary.

He believes the open approved permits (APs) for the import of luxury vans such as the Toyota Alphard and Vellfire would further impact the market as new energy van models from China are becoming popular.

“For me, one major disruption is yet to come and I’m referring to the open AP import of luxury vans such as the Toyota Alphard, Vellfire and the like. These imports will likely be impacted by the new energy van models from China,” he said.

According to the Malaysian Automotive Association, of the 260,236 auto units sold in 4M24, 238,247 were passenger vehicles (up 11%) and 21,989 were commercial vehicles, a drop of 15%.

A news report noted the sharp jump in TIV last year has seen Malaysia overtake Thailand to become South-East Asia’s second-largest auto market after Indonesia now.

The automotive industry ecosystem in the country comprises 22 automotive vehicle original equipment manufacturers and more than 600 suppliers/component manufacturers from various clusters including automotive covers, metals, plastics, electric and electronics as well as rubber.
Auto,MalaysiaAuto,CarSales,EVMarket,Perodua,TIV,CommercialVehicles,LuxuryVans,NewEnergyVehicles
Despite a positive start to the year, experts are forecasting a slowdown in the automotive market’s total industry volume (TIV) in the coming months.