Higher September sales not indicative of outlook for next year

KUALA LUMPUR: The higher motor vehicle sales in Malaysia for September is not indicative of the industry’s outlook for next year, with the overall sales trend expected to be down given the weakening prospects in the domestic economy, analysts said.

Vehicle sales in September rose 7.4% from August and 13% from September 2007.

Analysts pointed out that the boost in sales in September was a bit of an anomaly, partly due to buyers switching from more expensive models to the economical national car makes and consumers rushing to get their cars before the Hari Raya holidays.

But next year will be different, as the global slowdown kicks in and affects the local economy, they said.

“I am predicting a 10% contraction in sales for 2009,’’ said an analyst with a local brokerage.

He said the fall should not be larger because Malaysia’s gross domestic product was still expected to grow next year and that public infrastructure was still inadequate, making it necessary for people to own a car.

But AmResearch is looking at a 17% reduction in total vehicle sales next year.

Analysts are expecting a lack of new car launches, especially for the mass market, to hold back sales.

Among the few launches next year are Proton’s multi-purpose vehicle (MPV) and a new Perodua model in the latter part of the year.

Apart from that, Honda’s City is the only other car that is projected to be launched. This could generate some volume for the industry.

Another factor that could hold back sales next year is financing.

Hire purchase rates have gone up and that could affect demand in a weaker economy.

“Banks are bracing for lower volumes and have responded by raising their margins,’’ said one analyst.

Meantime, good sales are expected to continue for the rest of this year with the Malaysian Automotive Association expecting full year sales to surpass its 2008 sales forecast of 510,000 units.

Analysts said the jump in sales in September was mostly felt by national car makers which saw a rise in market share while the market share of the big Japanese car companies saw a decline.

“There has been a migration to Perodua and Proton,’’ said an analyst.

Proton’s new launches this year has seen the company claw back market share in the industry as the last two launches - the Persona and the Saga - is said to account for over 90% of Proton’s increase in sales.

The September sales performance in Malaysia bucked global trends as car makers in numerous countries were experiencing slower sales.

In the US, Europe and Japan, sales were down between 10% and 35% in September compared with August.