Booming car sales show Malaysians have stable jobs

Car sales are up. It’s a good sign that people are positive about their incomes and are thus buying brand new cars now.

But there are some who say they are only buying a new car because there are many attractive models in the market at present ranging from the Aruz to the X70 and even to the new look Persona and Iriz, for example.

These people should be reminded that car manufacturers launch attractive new models every year, some every other month.

And anyway, Malaysians are not known for buying the most attractive cars. Many buy a make they like the most, and only later tell others of the many compelling reasons why they bought a particular car.

The truth of the matter is that the purchase was an emotional decision that they then quickly justified as a “rational” one.

Among the more rational reasons is the low maintenance of the car (Japanese versus Continental, for example).

Another popular reason is the make and model’s fuel-saving capabilities (savings of 10 sen per km x 20,000 km per year is only RM2,000 x 10 years, which amounts to just RM20,000).

Yet, they bought a car which is more expensive by RM30,000)

The third most popular compelling reason is the car’s resale value. Some justify this by using percentages … come on, if you are buying a RM100,000 car and it’s down by 40% that’s RM40,000.

It’s wiser to buy a RM70,000 car and lose 50% instead. This is why if you love a certain brand and buy that brand, just say you love that brand.

Anyway, returning to the point of positive sentiments – car sales are UP. Double digits too.

According to an article in The Malaysia Reserve, Malaysia’s sales of vehicles increased by 22% or 10,816 units in May 2019 versus April 2019.

The major reason cited was the Hari Raya promotional campaigns by carmakers.

For the year, total industry volume (TIV) was up 41% to 60,780 units from 42,777 registered in the same month last year, according to statistics by the Malaysian Automotive Association (MAA).

Commercial vehicles were up 76% from the same month in 2018.

Nevertheless, this is what MAA said for June. Sales volumes for June 2019 is expected to be lower than the May 2019 level due to the short working month.

Based on the forecast by MAA for 2019, industry sales numbers are on track.

Total delivery is 253,808 units of vehicles, standing at 42.3%. As at end May, based on 600,000 the number should be 250,000 vehicles.

Proton clinched a market share of about 17.2% in May, where sales are accelerated by the SUV X70, as well as all new Persona and Iriz.

New cars are not needed if it’s only to take you from one destination to the next.

Buying a one year-old secondhand car will net you savings of easily 10-15% of the car price and it goes even lower for a three- to four-year-old car.

A car costing RM100,000 is also not a necessity if it’s just to buy a SUV because there are cheaper SUVs in the market.

RM70,000 is not needed to buy a MPV if it’s just to get an MPV because there are cheaper MPVs in the market too.

Thus, when Malaysians are able to choose a car they want to buy instead of being stuck with only the cheapest choice, it means that everyone continues to have good and stable jobs.

This is why you should be more confident. Then again, if the question is whether to get a car or a property, the answer will always be the latter.

*Featured Image is courtesy of Stock Photos from Jasni

This article first appeared in kopiandproperty.com

Charles Tan blogs at property investment site kopiandproperty. He dislikes property speculators and disagrees that renting is better than buying. He thinks it’s either property or poverty. He is presently the CEO of an auction house auctioning assets beyond just properties.