Abstract
Malaysia’s automotive industry achieved its second-highest ever sales in
2008, as the market exceeded
the expectations of the country’s
industry association. Sales rose by 12.5% to 548,115 units, exceeding
the
510,000 units projected by the Malaysian Automotive Association (MAA).
However, according to
BMI’s recently published Malaysia Automotives
Report, the growth is likely to be short lived as a result
of the global
economic slowdown, as well as rising prices on the back of escalating
production costs.
BMI has similarly revised its forecast for 2009
downwards, in line with our expectations for lower GDP
growth this year.
Our sales forecast now reflects a drop of 10% to 488,230 units.
There is
some optimism as both BMI and the MAA expect a return to growth in 2010.
Expectations are
also high for the small car segment, as the Association
envisages a shift towards more fuel-efficient cars
in financially tough
times. This will suit national manufacturer Proton, which has teamed up with
Japan’s
Mitsubishi for the development of a small car. Proton has
been seeking an international partner to give its
product range the lift
it needs to win back market share from both imported brands and domestic
rival
Perodua, which took the market lead away from Proton in 2006.
Mitsubishi was previously a major
shareholder in Proton till it was forced
to sell its stake amid financial difficulties in 2004.
The tie-up suggests
that Malaysia is still attractive to international manufacturers, despite its
ninth
position in BMI’s Business Environment Ratings for the
automotive industry in Asia Pacific, with a
rating of 50.2 from a possible
100. However, there is room for improvement in terms of the
country’s
regulatory environment. While the country is a leading
light of the ASEAN trade bloc, which has made it
a popular choice for
regional production activities in the auto sector, there is the potential for
greater
things if a proposed free trade agreement with the US is
finalised. In terms of the market itself, production
growth potential
receives an average rating, while potential sales growth is low in comparison
with its
peers.
Despite the growing influence of international brands,
domestic producers Perodua and Proton retained
first and second place in
the market, respectively, in 2008, although Perodua’s market share
slipped
slightly from 33% in 2007 to 30.5%. Proton, on the other hand,
regained some lost market share, rising to
26% last year from 24% in 2007.
Toyota led the foreign brands with 18.5% of sales, while Honda and
Nissan
followed with 5.9% and 5.6%, respectively. In the years to come, BMI would
expect Proton to
make up more ground following its tie-up with
Mitsubishi.
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