AmBank positive on car financing

by **hlk** Mon 20 Jun 2011, 13:06

KUALA LUMPUR: AmBank Group expects business this year to be positive compared to last year, due to better market conditions and the newly-tweaked Hire Purchase Act 1967.

Along with Maybank and Public Bank, AmBank is one of the country's top three auto financing companies, commanding a fifth of the market. Last year, it gave out RM7 billion worth of vehicle loans from over one million accounts.

AmBank general manager and head of auto finance Shaharudin Ismail said things will be positive due to better protection provided by the Act against unscrupulous car dealers, who want to sell to the public defective vehicles.

"The Act and the improving market conditions will impact us positively this year compared to last year," Shaharudin told reporters here last week after receiving the newly-revamped Perodua Myvi convoy at its headquarters.

Effective last Wednesday, all used vehicles will need to undergo an 18-point inspection requirement (from five-point before) that was included in the amendments to the Hire-Purchase Act 1967, to protect vehicle buyers from buying defective cars.

The amended Act was passed in Parliament in September last year.

"The used car market can improve a lot with the amended Act ... there may be fewer breakdowns, which in turn can spur the used-car market," said Shaharudin.

The local automotive sector is now waiting for the June sales and production report by the Malaysian Automotive Association to better gauge the sector.

Vehicle sales in May fell for the first time this year to 46,045 units from 50,883 units in the same period last year.

The fall was due to the shortfall in production from April 2011, resulting in insufficient supply to meet deliveries, the MAA said last week.

Sales volume for the five-month period, however, rose 3.4 per cent to 255,247 units from 247,110 units over the same period last year.

Last month, production slipped to 38,909 units from the 48,845 units registered in the same month last year while for the five-month period, it fell to 230,676 compared with 241,658 in the same period last year.

The industry expects output to be disrupted at least until the third quarter of the year.