Raya season should boost car sales, says research house

Ambank Research says stronger vehicle sales will ultimately depend on higher wages and improvement in economic conditions. (File pic)

PETALING JAYA: Malaysian car sales are within the projection of 603,000 units for 2019, a research house said today.

Ambank Research said the total industry volume (TIV) of car sales for April fell 9% month on month to 50,000 units. However, seen on a yearly basis, it increased by 6% to 193,000 units.

In a report released today, it said the Malaysian Automotive Association (MAA) expected vehicle sales to be higher in May and June boosted by the Hari Raya festive season promotional campaigns.

“Dealers will be giving out rebates, free gifts and other incentives to increase their sales,” it said.

Ambank Research also said that the promotional campaigns for the festive season in May and June would be similar to the tax holiday in 2018, providing a temporary boost to vehicle sales.

This festive period is seen as an opportune time for car manufacturers to clear and reduce their inventory to a healthier level as newer models will be launched in the later part of 2019 and next year.

In the longer run, the research house said, the auto sector would still be challenged by external and domestic economic uncertainties.

Consumer sentiment dropped while the unemployment rate rose slightly in March compared with the first two months of 2019.

Challenges remain in spurring consumer spending for big-ticket items such as cars despite slightly more attractive hire purchase financing rates due to the recent overnight policy rate cut by Bank Negara Malaysia.

Ambank Research also said a stronger growth in vehicle sales would ultimately depend on higher wage growth and improvement in economic conditions to lift households’ confidence levels.

It looked forward to the anticipated revised National Automotive Policy 2019 (NAP 2019) which is likely to be announced in the second quarter of the year.

The new policy will set the long-term direction of the automotive ecosystem and also provide more clarity on the development of the third national car project.