Malaysias turf..

Perusahaan Otomobil Kedua Sdn Bhd (Perodua) managing director Datuk Aminar Rashid Salleh expects vehicle sales in Malaysia to hit a new high in 2011.

“I believe that TIV (total industry volume) will reach 600,000 units next year based on the growing number of new car buyers and a healthy economy,” he told StarBiz.

Aminar said the local automotive industry still had a good growth potential despite sceptics arguing otherwise.

“Some might say that the automotive industry in Malaysia is a sunset industry, but I beg to differ. I believe that the industry has a lot of room to grow.

“The TIV in Malaysia has averaged about 500,000 units in the last decade and it would be easy to assume that the average would stay that way, but that is just not true.”

Aminar said Malaysia had a growing young population that would drive new vehicle sales.

“Malaysia is a young country, with 60 per cent of its population between the ages of 15 and 64, while 30 per cent are below 15 years of age. The demographic suggests that the number of car buyers will increase over time as a personal vehicle is still needed due to an inadequate public transportation system.”

He also said the government’s intention of transforming the nation into a high-income economy via the New Economic Model (NEM) would benefit the local automotive sector.

“We believe this will also help boost automotive sales as consumers will buy cars to reflect their status as income, especially disposable income, rises.”

From January to September, TIV rose 14 per cent to 453,249 units compared with 397,950 units in the same period last year. The Malaysian Automotive Association (MAA) has forecast TIV for 2010 to hit 570,000, its highest ever since reaching 552,316 units in 2005.

For next year, MAA president Datuk Aishah Ahmad said TIV was expected to grow at a marginal rate of 2 per cent to 3 per cent from 2010.

Industry observers and analysts also expect sales of hybrid vehicles to improve next year following the government’s decision to remove excise duties on such vehicles effective January 1.

Aminar said the automotive industry’s 2010 year-to-date sales performance had been “very encouraging”.

“If we annualise that number we will have an average of 151,100 vehicles per quarter. That means that the TIV potential (for 2010) is 604,400 units!

“However, the fourth quarter has always seemed to slow down a bit and, taking that into account, we believe that total TIV (2010) will range from 580,000 to 590,000 units.”

Aminar said Perodua was confident of achieving its sales target of 185,000 units this year. According to reports, the national carmaker expects to sell 190,000 vehicles in 2011.

On what was needed to improve the automotive industry, Aminar said the Government should keep to its plans under the National Automotive Policy (NAP) as it would give the auto players a solid path to strategise their long-term plan properly.

“The NAP also gives the automotive vendors precious time to gradually increase their competitiveness in terms of cost management, further improve their quality level as well as productivity and efficiency to be on par with their international counterparts.

“This will allow them to be able to export their products to other international players and not just rely on domestic players.”

Aminar also said any trade barriers in the automotive industry should be removed at a gradual pace and not suddenly.

“If all the trade barriers were abolished overnight then you would see resale value of cars plummet. This will devastate not only the resale market but new car sales as well as many car buyers usually trade in their vehicles.

“The customers with existing loans will find it difficult to settle as the value of their cars would be greatly diminished. It would be better if the current barriers were removed gradually over time to lessen any impact.”