New vehicle sales in Malaysia slumped 6.7% year on year (y/y) in April to 42,177 units, according to data released by the Malaysian Automotive Association (MAA). Passenger vehicle sales accounted for 37,893 units (down 7.4% y/y), while commercial vehicle (CV) sales remained flat at 4,284 units. Meanwhile, vehicle production dropped 27.3% y/y to 44,794 units during the month. Passenger vehicle output slipped 27.6% y/y to 41,075 units, while CV production declined 23.9% y/y to 3,719 units. In the first four months of 2016, industry sales fell 18.8% y/y to 173,432 units. Passenger vehicle sales totalled 155,254 units (down 18.3% y/y) and CV sales 18,178 units (down 22.7% y/y). During the period, vehicle production declined 22.6% y/y to 174,385 units. Output of passenger vehicles was down 21.7% y/y at 163,055 units, while CV production slipped 33.3% y/y to 11,330 units.
Significance: According to MAA, the fall in sales in April was due to more stringent hire purchase loan approvals, along with a more cautious buyer sentiment. The slowdown in decline this month compared to earlier in 2016 was mainly due to the introduction of the goods and service tax (GST) on 1 April 2015 last year. So this year the month of April has registered a decline rate less than that of March , although it highlights that production levels are still down by a double-digit percentage in the market. The MAA expects a slowdown in the domestic automotive industry in 2016. It forecasts a 2.5% y/y slide in total industry sales this year. IHS Automotive predicts total industry sales in Malaysia of 667,077 units during 2016 (down 0.9% y/y), split between passenger car sales of 586,902 units (down 0.2% y/y) and CV sales of 80,175 units (down 5.3% y/y). With sales of 92,840 units in 2016, the Perodua Viva is expected to lead sales in the country this year, despite being forecast to register a decline of 10.2% y/y this year. Perodua will, in order to further expand its presence in the country, launch a B-segment sedan in September, according to our data. We also forecast total vehicle production in the country to decline by 1.6% y/y to 616,273 units, split between passenger car output of 554,464 units (down 1.1% y/y) and CV output of 61,809 units (down 5.7% y/y).
