PETALING JAYA: The Malaysian Automotive Association (MAA) expects Malaysia’s automotive total industry volume (TIV) to grow 2.4% to 550,000 units this year due to an improved global economic outlook and rising consumer sentiment.

President Datuk Aishah Ahmad said the multiplier effects from the Government’s stimulus packages would also boost the economy and create demand for new vehicles.

“It is going to surpass last year’s sales, definitely,” she told a press conference on the automotive outlook for 2010 yesterday. TIV for 2009 was 536,905 units.

Aishah said the Government’s 5% gross domestic product growth target for 2010 (versus an estimated 3% dip for 2009) was also another factor for the better automotive outlook.

If achieved, the 550,000 TIV forecast for 2010 would be the country’s second highest, surpassing 2008’s TIV of 548,115 units. Malaysia recorded its highest TIV in 2005 with 552,316 units sold.

“We expect 2010 to be a record year,” said Aishah, adding however that an increase in interest rates would have a significant impact on vehicle sales.

“Interest rates will have a bearing on vehicle sales. (If rates increase), sales would be impacted as it will affect the purchaser’s monthly payments. But it also depends on the quantum of increase.” Aishah said the MAA did not expect any increase in interest rates any time soon.

“We forecast interest rates to remain stable. At this point in time, we don’t see any indication that it will go up,” she said.

Aishah also said the recently announced petrol subsidy scheme, which requires owners of cars with bigger engine capacities to pay a higher price for petrol, was likely to have a short-term impact on sales.

“Initially there will be some impact but in the longer term people will get used to the price of fuel. If you can afford a bigger car, you can afford not having the fuel subsidy,” she said.

The Government earlier this month said it was planning a fuel pricing mechanism to ensure that only targeted groups, particularly those with lower income, would receive the fuel subsidy.

“However, we would like the Government to be fair and conduct a thorough study because owners of bigger engine sized cars are already paying higher excise duties because excise duties are based on engine capacity.

“At the same time, they are also paying higher road tax. So the Government is collecting a lot of taxes from these vehicle owners,” she added.

Aishah also said that while 2009’s TIV recorded a 2% dip from 2008, it exceeded the MAA’s initial forecast of 500,000 units. She said demand for vehicles improved in the final quarter of 2009.

“The better-than-expected performance was due to the introduction of the Government’s stimulus packages and its decision to liberalise the 27 sub-sectors, the introduction of the auto-scrapping scheme, improved business confidence, increased consumer spending and aggressive sales promotion activities by MAA members.”

In 2009, a total 486,342 passenger vehicles were sold compared with 497,459 units in 2008 while sales of commercial vehicles dipped to 50,563 units from 50,656 previously.