Auto sales in Malaysia for the first half of 2023 grew 10.3% year-on-year to 366,037 units. This means that the new vehicle market has not only returned to pre-pandemic levels, but is actually higher than before. This rosy 1H2023 total industry volume (TIV) is on the back of 2022’s all-time record sales of 720,658 units.
The Malaysian Automotive Association (MAA), which held a press briefing today, attributed the strong first half performance to the fulfilment of bookings received during the Penjana sales tax exemption period last year, the bulk of which were registered before March 31. A fair number of these bookings were also carried over and registered from April to June.
The robust sales were driven mainly my national makes. In 1H2023, market leader Perodua and second placed Proton sold a combined 220,702 units, a 19% year-on-year increase. In contrast, non-national makes sales of passenger vehicles dropped 3% to 105,959 units. This means that currently, P1/P2 take up around 68% of the total passenger vehicle market, which is 5% higher compared to the same period last year.
Penjana aside, the auto club says that the resilient domestic economy (GDP expanded by 5.6% in the Q1 2023), new model launches, competitive prices and improved industry supply chain environment also contributed to the elevated TIV. Total production also rose in tandem with sales – up 44,602 units or 14% y-o-y to reach 362,535 units.
With things looking good, MAA has decided to revise upwards its full year 2023 TIV forecast to 725,000 units. This is a hefty 75,000 unit increase from the previous 2023 forecast of 650,000 units that was announced in January. If the 725k target is met, it will beat last year’s all-time high.
Among the reasons cited for the TIV forecast increase are Malaysia’s stable economic outlook (GDP expected to expand 4-5% for full year 2023, driven by domestic demand), new model launches, MAA members’ continuation of aggressive promotional strategies and value-added services, further improvement in the auto industry supply chain environment, and Bank Negara’s decision to maintain OPR at 3% at its recent MPC meeting.
On the other hand, the softening of consumer spending in the rest of 2023, weighed down by worries over rising cost of living, and the weakening of the Ringgit against major foreign currencies are possible dampening factors. Uncertainties about the domestic and global economic environment might also play a part in auto sales.
At the event, MAA’s new president Mohd Shamsor Mohd Zain also announced that the KL International Motor Show (KLIMS) will make a return next year, with the exact dates to be confirmed later.
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