KUALA LUMPUR: Total vehicle sales in April fell 18.2% to 41,135 units from 50,279 in the same month last year due to the unexpected increase in hire-purchase (HP) interest rates, according to the Malaysian Automotive Association (MAA).

The April sales were 3,070 units, or 7%, lower than in the previous month, it said in a statement yesterday.

Of the 41,135 units sold in April, 37,259 were passenger vehicles and the remaining 3,876 units were commercial vehicles.

Last month, HP interest rates for new non-national cars increased by about one percentage point to 3.25% for loan tenures of five years and below, 3.4% for six to seven years and 3.5% for eight- to nine-year loans.

MAA said it did not expect sales volume in May to improve due to the full impact of the increase in HP interest rates.

OSK Research motor analyst Ahmad Maghfur Usman concurred, saying buyers were likely to hold back their purchases as a result. “The remaining months will still be tough as banks have raised HP rates on non-national cars,” he told StarBiz.

Ahmad Maghfur, however, said he expected sales to pick up in the second quarter of the year, adding that the total industry volume for 2009 was expected to fall 15% to 467,797 units.