Demand for cars accelerates post-Covid

PETALING JAYA: The automotive industry has experienced a dramatic boost in recent times. Once plagued by low sales and uncertainty, car dealerships are now enjoying unprecedented growth.

The Malaysian Automotive Association (MAA) said motor vehicle sales in the country in the first half of the year increased by 10.3% compared with the previous year, reaching a total of 366,037 units. This follows the record breaking sales achieved in 2022, with a total of 720,658 units.

One notable player in the industry is national carmaker Proton, which has achieved four consecutive months of year-on-year sales growth in 2023. In April alone, Proton sold 9,415 units, marking a 6.5% increase from the same month last year.

Its deputy CEO Roslan Abdullah said: “The Proton X50 remained the best-selling B-segment SUV, while the Proton Persona retained overall leadership for the B-segment sedan market.

“The company’s export sales also saw significant growth, with 187 units shipped in April.”

Meanwhile, UMW Toyota Motor Sdn Bhd, a non-national carmaker, also achieved impressive sales figures, with a total of 101,035 vehicles sold in 2022.

The 40% increase from the previous year established Toyota as the leading non-national brand in Malaysia.

Commenting on the high sales trend in motor vehicles, Malaysian Institute of Economic Research senior research fellow Dr Shankaran Nambiar said it would potentially contribute to the country’s economy.

“As the country reopened after Covid-19, there was increased demand for various goods, including cars. The release of new car models with innovative features has attracted more consumers to make car purchases.

“The improved economic conditions and positive expectations regarding income, employment and wages have led to higher demand for cars, benefitting the automobile and supporting sectors.”

He said the electric vehicle (EV) market in Malaysia also experienced significant growth, as consumers appreciate its green technology and sustainability features, adding that the growth of the EV market also presents opportunities for the country’s automotive industry.

BYD SD Motors Malaysia (official distributor for China carmaker BYD) recorded bookings for 1,000 vehicles within the first 10 days of launching its BYD Atto 3 EV in December last year.

One reason for the huge interest in BYD EVs is the fact that its blade batteries are being used in Tesla’s Model Y electric crossovers produced at the Berlin gigafactory, resulting in a significant increase in charging speeds.

But BYD is not the only Chinese carmaker making waves in the country.

Another EV, the Ora Good Cat manufactured by Great Wall Motor and distributed in Malaysia by Great Wall Motor Sales Malaysia Sdn Bhd, is also attracting much interest.

MAA president Datuk Aishah Ahmad said the sales of EVs increased from 274 units in 2021 to 2,631 in 2022, representing an 860% growth.

“This growth can be attributed to the introduction of new EV models and the continuation of tax incentives for EVs. This year, the association expects sales volume to surpass that of last year.”

However, Shankaran said with an economic growth rate of 2.9% in the second quarter of this year, he predicts a moderation in vehicle sales in the upcoming months.

“As we enter the third quarter of the year, expectations for growth are not very strong. The upcoming months may see less robust growth, leading to a decrease in demand for cars.

“For now, the automotive industry in the country is witnessing a remarkable recovery, with increased car sales benefitting the economy and supporting sectors.

“But challenges such as a weaker economy, potential strain on infrastructure, and the need for proper safety measures have to be addressed to prevent a negative impact on motor vehicle sales moving forward.”

MAA said car sales in the first half of the year increased by 10.3%.

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