Abstract
It is unlikely that Malaysia' s automotive industry will repeat 2008' s 12.5%
growth this year. In its latest
Malaysia Automotives Report, BMI has
revised its sales forecast for 2009 downwards to a decline of
10%, largely
as a result of the global financial slowdown. The market is already following
the expected
downturn as sales for January fell by 17.5% to 37,427 units.
However, the Malaysian Automotive
Association (MAA) attributed the decline
to a shorter working month, due to the Chinese New Year, and
said that
sales could have been worse were it not for the launch of new models.
There is some cause for optimism then as both BMI and the MAA forecast a
rebound in sales growth by
2010. At year-end 2013, the end of our
five-year forecast period, we expect sales to be around the
600,000 units
mark. BMI also expects national manufacturer Proton to regain lost market
share by 2010
as it enters into a small car agreement with Japan' s
Mitsubishi Motor. Despite posting a loss for the third
quarter of its
current financial year ending March 31, Proton remains profitable for the
first nine months
of the financial year, with a net profit of MYR21.1mn
(US$5.69mn) compared with a loss of
MYR32.9mn (US$8.87mn) in FY08.
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 Association of Southeast Asian Nations
(ASEAN) trade bloc, which has
made it a popular choice for regional production activities in the autos
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.
Most of the major
players started 2009 with a slump in sales. Leading international brand Toyota
Motor
saw sales for January fall by around 40% y-o-y, while domestic
market leaders Perodua and Proton
posted declines of 5% and 4%,
respectively. However, Japan' s Honda Motor managed to post its best
ever
monthly sales, largely bolstered by the success of its new City model. Sales
of 3,815 units were
enough to claim 10% of the total market while Honda' s
Malacca-based plant is working at full capacity to
meet demand for the
model. Although it is still early in the year and Honda' s market share is
still way off
the 18.5% claimed by Toyota in 2008, there is potential for
a shake-up among the international giants.
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