Affordable cars to bolster vehicle sales numbers

Kenanga Research is projecting total industry volume of 720,000 units for 2023, matching the 2022 record of 720,658 units.

PETALING JAYA: With resilient demand in the affordable-car segment, Kenanga Research says it is optimistic about vehicle sales in Malaysia.

The research house is projecting total industry volume (TIV) of 720,000 units for 2023, matching the 2022 record of 720,658 units.

This aligns with the Malaysia Automotive Association’s (MAA) projection of 725,000 units for 2023, the research firm said in a report.

Kenanga Research also announced its 2024 TIV forecast of 710,000 units, reflecting a marginal year-on-year easing attributed to the implementation of targeted fuel subsidies.

“We believe a new car is still an affordable luxury for most Malaysian households despite high inflation and a slowing global economy.

“We now see greater opportunities in the affordable segment as it will be less affected by the introduction of the targeted fuel subsidy that may dent the demand for mid-market vehicles as it will erode the spending power of the M40 group,” it added.

The optimism is underpinned by strong consumer confidence supported by a stable economy and healthy job market, the research house added.

It said the affordability of motor vehicles is also due to stable new car prices resulting from the deferment of new excise duties. This has prevented potential price hikes, estimated to be between 8% and 20%, of locally assembled vehicles.

Additionally, hire-purchase costs will potentially be cheaper with the introduction of the reducing balance method in the calculation of interest charges.