Sunday, 28 October 2012
Vehicle sales seen picking up
PETALING JAYA: Vehicle sales have been forecast to pick up in the last quarter of 2012 as automotive companies are expected to intensify their promotional campaigns to meet year-end targets, said analysts.
They also forecast the better figures would be due to pent up demand by consumers who had anticipated a slash in excise duties on cars in Budget 2013.
“It could be tricky to predict, as it will depend on whether consumers continue to hold back their purchases (in the fourth quarter of this year).
“They are trying to avoid buying a car that could be significantly cheaper next year,” said RHB Research analyst Alexander Chia.
However, he said based on recent media reports, it appeared that there would be no reduction in the duty structure.
“This could dampen expectations of any potential drop in car prices and help to normalise sales somewhat,” he added.
In recent months, it had been speculated that the revised National Automotive Policy would include a policy that would address the gradual reduction of car prices in the country.
It was then speculated that a downward revision of vehicle excise duty would be announced in Budget 2013 late last month.
Earlier this week, International Trade and Industry Minister Datuk Seri Mustapa Mohamed told the Dewan Rakyat that the Government had no plans for a downward revision of excise duty for imported and locally manufactured cars.
He had added that a sudden reduction in excise duty would significantly impact the Government's revenue, estimated at RM7bil a year.
OSK Investment Research automotive analyst Ahmad Maghfur Usman said the announcement made by Mustapa should help boost sales in the last three months of the year.
“We expect the fourth quarter to be a bit more encouraging,” he said, adding that the Malaysian Automotive Association's (MAA) total industry volume (TIV) forecast of 615,000 was still achievable.
For the nine-month period ended September 2012, TIV rose 1.8% to 458,447 units, according to data by the MAA. TIV for September was down 11.5% month-on-month to 45,872 units.
Chia said he expected local car companies to intensify their advertising and promotional campaigns in the remaining months of the year, despite it traditionally being a weaker sales period.
“All in, we believe that monthly sales in the fourth quarter should be better than September, helped by special promotions and discounts as car companies make a push to meet their 2012 sales targets.
“We also expect new model launches (like the Nissan Almera) to boost interest among consumers,” he said.
He also said there could be demand due from customers that were expecting an announcement on a potential excise-duty cut in Budget 2013, adding that RHB was forecasting TIV to hit 612,000 this year.
“For the MAA's 615,000 TIV forecast to be met, average monthly sales of 52,000 units will be required. We believe it will be close,” he said.