Malaysia vehicle sales up 22.7% in first half

Malaysia vehicle sales up 22.7% in first half

KUALA LUMPUR (Reuter): Malaysia's vehicle sales for the first six months of 1997 rose 22.7 percent, reflecting the country's continuing economic strength, the Malaysian Motor Traders Association (MMTA) said yesterday.

"This strong growth is attributed to the robust economy and rapid development of the country which resulted in greater demand, particularly for commercial and four-by-four vehicles," said the trade association.

Vehicle sales for the first half of 1997 totaled 192,518 units, compared with 156,862 units in the same period last year.

Passenger car sales grew by 20 percent year-on-year, while commercial vehicle sales jumped 28 percent, while passenger and commercial four-wheel-drive vehicle sales rose 42 percent, said the MMTA.

Analysts said the sales figures were broadly in line with their expectations, but agreed that strong demand, wrought by an ebullient economy, was the main factor for the continuing strong growth.

"The figures were pretty much in line with my estimates, but still I think they are very, very decent," said Chehan Perera, automotive analyst at ABN Amro Hoare Govett in Kuala Lumpur.

"As long as the economy grows above six or seven percent, vehicle sales will continue to be strong," said Perera.

Malaysia's gross domestic product expanded by 8.2 percent in 1996 and is expected to remain stable this year.

Four-wheel-drive vehicles, both passenger and commercial, showed a stronger growth rate than passenger cars as they reflected lifestyle changes, said analysts.

The introduction of new four-wheel-drive utility vehicles such as the Toyota Prado and Nissan Terrano contributed to the growth of this segment, said Corrinna Cheah automotive analyst at ING Barings in Kuala Lumpur.

"The four-wheel-drive segment is coming on strongly. There is an increasing popularity for these vehicles," said Cheah.

The particularly high growth in this segment was also attributable to a smaller base level, said Cheah.

Currency fluctuations do not affect vehicle prices in Malaysia, as distributors have to apply to the government before raising prices.

Under current legislation, distributors can only apply for price changes if there has been a five percent or greater fluctuation in the rate of the ringgit against either the Japanese yen or the U.S. dollar over a specified period.

The growth in commercial vehicle sales was attributed to "on- going mega projects", said the MMTA.

Sales of locally made cars amounted to 113,405 units in the first half of 1997, compared to 93,937 units in the same period in 1996, a growth of 21 percent.

The cars include the Proton, made by Perusahaan Otomobil Nasional Bhd and Diversified Resources Bhd, and the Perodua made by MBM Resources Bhd.

A relatively low penetration rate compared to other countries in the region was also a factor for the rapid growth, he said.

Malaysia has around 7.5 people per car, compared with five people per car in Taiwan, which is the closest approximation to Malaysia in Southeast Asia, said Perera.

Singapore has a penetration rate of around eight people per car, but that figure is skewed because it is a controlled market for cars, said Perera.

The United States has around 1.5 people per car, he said.