4.2% vehicle sales growth seen in 2014

KUALA LUMPUR: Frost & Sullivan expects vehicle sales to grow 4.2% to 675,000 units in 2014, driven by positive economic conditions and continuous investment flow.

Frost & Sullivan partner and head of automotive and transportation practice for Asia-Pacific Kavan Mukhtyar said new vehicle launches were also expected to boost sales this year.

“These include the Perodua Alza, Toyota Corolla Altis, Citroen DS3, Ford Fiesta EcoBoost, Hyundai i30 hatchback and Proton’s global small car, the P2-30A, amongst others,” he told a media briefing yesterday.

Kavan added that the much-awaited National Automotive Policy (NAP), which is expected to be announced in the middle of this month, would also be a catalyst to take the automotive industry forward.

He, however, said that carmakers were likely to adopt a cautious approach and await policy clarity post-NAP announcement.

With speculation that the focus of the NAP would be on promoting energy-efficient vehicles (EEV) and turning the country into an EEV hub, Kavan said Malaysia needed to develop a strong ecosystem of suppliers that fed into the EEV supply chain.

“Hopefully, the NAP would provide the necessary framework of policy and incentives to drive this development.”

He noted that both Thailand and Indonesia already had well-established green-vehicle policies.

“Global automotive investors (especially continental brands that are not yet in Thailand or Indonesia) do have options. If Malaysia is able to swiftly implement the new policy, then it has an opportunity to attract investments.”

Kavan, meanwhile, cautioned that credit tightening and further subsidy rationalisation initiatives by the Government might have an impact on sales.

“We expect to see some impact from the rationalisation initiatives in the first quarter of this year. We saw a similar reaction when loans were tightened in 2012,” he said.

“However, this is how consumers usually react to news like this. Eventually, they would get used to it and we expect sales to improve in the second quarter of the year.”

As for vehicle sales for 2013, Frost & Sullivan has projected total industry volume (TIV) to reach 648,000 units, which is a 3.2% growth from the previous year.

Earlier this week, StarBiz had reported that the Malaysia Automotive Institute, a government body under the International Trade and Industry Ministry, was claiming that the TIV for 2013 had exceeded 652,000 units, surpassing the Malaysian Automotive Association’s (MAA) forecast of 640,000 units.

The official TIV for 2013 will be announced by MAA at its first bi-annual press conference later this month.