KUALA LUMPUR, Jan 17 — Malaysia’s automotive industry is expected to suffer a net loss of RM350 million in 2016 due to weaker sales, poor consumer sentiment and stricter loan approval rates, according to CIMB Research.
According to its report published by The Star, last year’s sales paled in comparison to 2015’s net profit of RM1.2 billion, and sector revenue fell 13.8 per cent in 2016 as a result of lower sales volume.
“It also took a big hit from the depreciation of the ringgit against the dollar and yen, given that most of the cost components such as the imported completely-built-up models and completely-knocked-down kit components are derived in foreign currency,” The Star quoted CIMB Research as saying.
The research house pointed out that the total industry volume (TIV) fell 12.5 per cent year-on-year to 515,000 units for the 11-month period last year.
“The total hire purchase loans approval lost 3.5 percentage points year-on-year to 52.9 per cent, while the total loans applied amount also dropped 9.4 per cent or RM7.7 billion in 2016.
“The lower TIV was also attributable to higher car prices as several auto companies raised their prices in 2016,” the research house added.
It said that it expects a tepid TIV growth of two per cent in 2017, which will be driven by sales recovery in domestic brands following the multiple new model launches at the end of 2016.
“We expect national brand volumes to grow by four per cent to five per cent, while foreign brand volumes to drop by one per cent to two per cent in 2017.”
But CIMB Research also said consumer sentiment will likely stay weak as least until the second half of 2017, due to uncertainty in the domestic market amid currency volatility.
As of November last year, national carmaker Proton has sold 65,067 units which puts it in third position of TIV. Fellow national company Perodua is still leading with 182,485 units, followed by Honda with 80,369 units.
