MAA president Mohd Shamsor Mohd Zain.
PETALING JAYA: The Malaysian Automotive Association (MAA) has revised its total vehicle sales forecast for 2024 to 765,000 units, higher than the previous estimate of 740,000 units.
MAA president Mohd Shamsor Mohd Zain said this new forecast remains about 4% lower than the record-breaking sales of 799,731 units achieved in 2023.
The MAA projects that the total industry volume (TIV) for passenger vehicles will shrink by 3% to 696,150 units, while the TIV for commercial vehicles is expected to decline more significantly, by about 14.5% to 68,850 units.
Mohd Shamsor attributed its revised TIV forecast for 2024 to the resilient domestic economy, coupled with the pause on interest rate hike.
He said the government is optimistic about Malaysia’s gross domestic product, expecting it to expand within the official forecast range of 4% to 5%.
“Bank Negara’s decision to maintain the overnight policy rate at 3% at its recent Monetary Policy Committee meeting may also help to stimulate domestic spending including for big-ticket items like new cars,” he said yesterday in conjunction with the association’s review of vehicle sales for the first half of 2024 and outlook for the second half.
Another factor contributing to the revised forecast is the healthy backlog of orders, particularly in the A-segment passenger car market, indicating strong demand that will continue to drive sales in this segment.
“They include exciting newer and affordable models with newer features for both internal combustion engine vehicles and all types of electrified vehicles (xEV),” he added.
Additionally, Mohd Shamsor said MAA members are continuing their aggressive promotional strategies, providing value-added services and more options to customers.
These efforts are anticipated to improve demand and contribute positively to the overall sales forecast.
In the first half of 2024 (1H24), the country sold a total of 390,296 vehicles, marking an increase of 6.6% compared with the same period in 2023, where sales totalled 366,176 units.
The growth was driven by robust performance in the passenger vehicle segment, which saw sales rise to 356,859 units, up by 9.2% from 1H23.
Meanwhile, commercial vehicle sales decreased by 15.3%, totalling 33,437 units in 1H24 compared with 39,479 units in 1H23.The increase in TIV was supported by a resilient domestic economy, stable socio-political environment, and successful launches of new vehicle models.
It also included a notable surge in electric vehicle (EV) sales, which more than doubled compared with 1H23, reaching 6,617 units in 1H24.
Going forward, industry experts expect Chinese EV makers to capture a bigger market share, exerting competition to legacy automakers.
This is not only owing to the variety of futuristic designs that the Chinese automakers manufacture, but also to their affordability, giving them an evident advantage over legacy brands who had adopted EVs.
TA Research analyst Angeline Chin highlighted the significant impact of affordable Chinese EV brands in the market.
“The popularity of EVs is on the rise globally.
“Chinese EVs tend to be more cost-effective primarily because a significant portion of the battery manufacturing process is managed by Chinese firms.
“The vertical integration gives them a notable pricing advantage, particularly in competitive market scenarios and potential price wars,” she told StarBiz.
The local EV sector will see increased competition, spurred by new brands entering the market and existing players expanding their offerings in 2H24.
“EV volumes are expected to rise during this period, providing consumers with greater access and a wider range of choices,” she said.
Automotive journalist Yamin Vong noted that EV sales in Malaysia would continue their robust growth.
“There are still a lot of households that live in landed properties where EV owners can charge at home at low electricity costs from wall chargers,” he said.
According to Vong, Malaysia is still in the early stages of EV adoption, with significant upside potential as urban motorists with landed properties realise the benefits of EVs, such as charging every three days with a normal driving range of 100km per day.
On the impact of Chinese EV brands on traditional continental brands, Vong said the latter would certainly lose market share to the former.
“The legacy brands with EVs will certainly lose market share to Chinese brands.
“Firstly, the Chinese brands have a 30% cost advantage because of the large size of the Chinese market and the Chinese car makers’ control of their supply chains.
“Secondly, China supports EVs as a national policy with a lot of subsidies, which is a strategic move for energy security,” he explained.
According to Vong, Chinese manufacturers launch multiple models annually, catering to various market segments from entry-level cars to high-end super EVs.
“And when a RM100,000 EV from China can run circles around a RM800,000 combustion car from a legacy brand, it’s clear why Chinese car showrooms are as busy as a night market,” he added.
Kenanga Research analyst Wan Mustaqim also noted the continuing influx of Chinese automakers over the next few years due to their affordability and innovative designs.
With local companies partnering with more Chinese EV makers, he expects this trend to continue.
However, when asked if Malaysia’s automotive industry, specifically locally built cars, will face disruption like Thailand due to the presence of Chinese automakers, MAA vice-president Sarly Adle Sarkum denied this possibility.
“Basically, in Malaysia, first of all, we have to look at the market. Thailand is a totally different market than Malaysia. Government actions on the automotive market there are also different. I think this is where MAA would like to say thank you to the Malaysian government for their overwhelming support in making sure that the industry remains as it is,” he noted.
On the sales outlook for EVs, Mohd Shamsor said the country is on track to reach its target of 65,000 of all types of xEVs for the whole of 2024.
When asked about the progress on charging stations and whether Malaysia is on track to hit 10,000 stations by the end of the year, he acknowledged the efforts taken and noted that while progress was slow initially, there has been a noticeable improvement.
“The government has set a goal for 10,000 charging stations and we appreciate the efforts being made. We will see what happens, but I see some progress moving towards that target,” Shamsor concluded.
