The Malaysian market in the first six months of 2012

The total number of new vehicles registered in Malaysia for the first six months of 2012 was 301,224 units, an increase of 4,021 units or 1.4% higher than for the same period in 2011. This increase in the Total Industry Volume (TIV) occurred in spite of the fact that other than for February, the monthly sales in the first four months of the year had been consistently lower than the same months in the previous year.

Elaborating on the challenging situation faced by the industry this year, Malaysian Automotive Association (MAA) President, Datuk Aishah Ahmad, said that two main factors inhibited sales. The first was continued disruption in the supply chain that had been caused by the massive floods in Thailand during the last quarter of 2011. Though things began to improve from the end of the year, parts supplies were still limited during the first quarter of 2012 and Honda, in particular, did not resume local assembly operations till April.

The other factor which affected sales, especially at the lower end of the market, was the tightening of the high-purchase (H-P) loan approval process which was instructed by Bank Negara at the beginning of the year. Many purchasers found difficulty in obtaining loans or the processing took longer, affecting not only the dealers but also some assembly plants.

A Peugeot 207 Sedan being assembled at Naza Automotive Manufacturing in Kedah. Visit www.peugeot.com.my to know more about this model

Datuk Aishah said that the situation improved after April as the various parties held discussions with Bank Negara to resolve the problem and consumers also adjusted to the stricter requirements.

In the Passenger Vehicle category, passenger cars accounted for 265,855 units or 88% of the TIV, almost the same as last year. Commercial vehicle registrations (including pick-ups, which account for 68%) rose by 12.1% to 35,369 units.

The Total Production Volume of 282,060 units was 8,661 units higher than the same period in 2011. However, a closer look shows that Passenger Vehicle production had declined by 1,992 units while Commercial Vehicle production rose by 10,653 units (50%). The jump in the numbers was due to an 80.8% increase in the assembly of pick-ups.

A new model being assembled at the Mitsubishi Motors factory in Thailand. To know more about Mitsubishi vehicles available in Malaysia, visit www.mitsubishi-motors.com.my

“The TIV has been rising in May and June and we believe the upward trend will likely continue for the next few months, especially with the festive season starting,” said Datuk Aishah. However, she said that the association still expects the second half of 2012 to be challenging as Bank Negara has projected a lower economic growth rate.

Nevertheless, the MAA maintains its original forecast for the whole of 2012 which is 615,000 units or 2.5% higher than in 2011.

Of this, Passenger Vehicles are expected to account for 547,000 units and Commercial Vehicles, 68,000 units. Growth of the TIV over the next few years is projected at around 2% a year and in 2016, the TIV is forecast to be 669,000 units

The MAA also issued sales data from other ASEAN markets for the first five months of 2012. Malaysia ranked No. 3 after Thailand which reported 483,052 units, and Indonesia which reported 433,527 units.

When asked about the Competition Act issue which has caused some MAA members to stop providing their historical sales data to the association – something which has been done for over 40 years – Datuk Aishah said that the matter is being handled by lawyers to obtain exemption from the Malaysian Competition Commission (MyCC). She remarked that the recent statements made by the MyCC regarding the sharing of data as being against the Competition Act were incorrect.

“It was stated by an MyCC official that as a result of such sharing of data, parts prices will go up. I find it hard to understand how parts dealers would use the data and decide that their prices should be raised!” she said.

“The MAA is an association, not a cartel,” she stressed, “and we have been compiling sales data from our members and making the data available to all members and subscribers. The data is historical in nature, not forecasts, and it allows every company to have a better idea of market trends. Such information will encourage competition, which is what the Competition Act aims to achieve,” she explained.

Datuk Dr. Ang Bon Beng, a MAA Vice-President and also Executive Director of Edaran Tan Chong Motor added: “By submitting our data to the MAA, we are being transparent and I believe that is how business should be done. If data is not made known, then we would not be transparent and isn’t that wrong?”

“We do not ‘fix’ prices as we are all competitors. If we know that our competitors are doing better than us in a certain segment, then we would find ways to challenge them and that generates competition. So why should the sharing of such data be stopped?” he asked in puzzlement.

Datuk Aishah also said that the MAA had checked with associations in other countries such as the USA, India, Japan and Australia, and found that the data they receive from their members is detailed, just as it has always been in Malaysia until this year. “Bear in mind that these countries implemented a similar Competition Act earlier than Malaysia and they do not have such issues as sharing of historical sales data being an offence,” she said.