Business

Tuesday November 17, 2009

Increase in car sales seen

By JAGDEV SINGH SIDHU


KUALA LUMPUR: Auto sales are expected to rise next year due more to a rebound in economic growth rather than a slew of new models.

Analysts do not expect sales to breach 2005’s total industry (TIV) volume record of 552,316 as there are only be a couple of volume drivers slotted in 2010.

“Malaysia auto sales will see stable growth,” OSK Investment Bank Bhd analyst Ahmad Maghfur Usman, who has forecast TIV coming in at 548,000 units, told StarBiz.

The TIV is projected to come in at 500,000 units this year, a number which the market feels is achievable.

Waja cars in the Proton factory. The Waja replacement model likely to be launched in the second half of 2010 is expected to boost auto sales

At 500,000 vehicles, the number of vehicles sold is 9% lower than the 548,115 units sold in 2008.

“It won’t breach 2008’s total industry volume as there are no new models in the C segment that can boost volume,” he said.

MIMB Investment Bank Bhd analyst Rosnani Rasul sees total auto sales at 525,000 units in 2010, as demand for cars will rise along with household incomes as the economy improves.

She does not think that only new models will be needed to give auto sales a boost as facelift editions of existing models have shown to give sales a lift when launched.

The one big car launch already on the way will be Perodua’s MPV. Perodua, which hopes to sell a minimum 3,500 units of its latest model, is starting the MPV production at 4,100 units a month.

The launch of the MPV, which is slotted for next week, has raised hopes at Perodua which sees 2010 as its best sales year on record.

Affin Investment Bank Bhd analyst Chong Lee Len expects 2010 sales to come in a little flat, at most posting a small rise in sales to 515,000 units.

She believes sales will get a lift from the rebound in the economy rather than car companies rolling out mass market winners.

“Perodua and Proton are at their peak performance,” Chong said, hinting that not much of a boost could be expected from those two car companies that commanded a lion’s share of the car market.

While 2010 is expected to see a rise in auto sales, whether or not 2005’s industry sales record can be broken depends on a few more factors.

The new Waja should be one.

Proton is expected to introduce its Waja replacement model in the second half of next year and, going by the response the Waja received when it was launched about 10 years ago, demand should be good.

The other non-national volume driver has been Toyota, which did not launch a new model in 2009 because of the poor economic environment.

“It doesn’t normally tell if it plans to launch a new model but my bet is that it will,” Rosnani said.

Chong concurred, saying that Toyota was a “big number” contributor to total industry sales.

Although hire purchase rates are expected to firm up in 2010, analysts don’t think it will make any real dent in the demand for cars.

“In terms of sensitivity, it does not eat much into sales outlook,” said Chong on the influence of interest rates on car sales.


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