Malaysia Automotive Association Reports Record Sales For 2023; Sets Conservative Forecast For 2024

The Malaysian Automotive Association (MAA) has reported record sales of new vehicles from its members for the 2023 calendar year. Sales of new motor vehicles in 2023 rose 11% to a new all-time high of 799,731 units (from 721,177 in 2022). Of this total last year, passenger vehicle sales accounted for 719,160 units, or about 90% of the total pie. 2023 was also the 2nd consecutive year the TIV (total industry volume) exceeded the 700,000 units mark.

According to MAA, last year’s sales performance can be attributed mainly to:

• Fulfilment of tax-free cars bookings received, a majority of which were registered before the 31 March 2023 deadline. A fair number of these bookings were also carried over and registered after 31 March 2023.
• A more stable socio-political environment following the formation of the Unity Government post GE-15.
• Resilient domestic economy.
• New model launches including electric vehicles with very competitive prices that helped spur sales.
• Improvements in industry supply chain environment.

“Kudos to the Government for steering the country into a very much stable socio-political environment and achieving much progress. Such favourable conditions have enabled businesses to thrive and succeed. On behalf of all MAA members, I would like to express our heartfelt and sincere appreciation to the Government of Malaysia for all the support and assistance rendered to the automotive industry,” said Mr Mohd Shamsor Mohd Zain, MAA President.

The bulk of passenger car sales in 2023 was largely due to strong sales from the 2 national brands which together make up about 66.9% of the passenger car sales market (481,300 vehicles). This is also an increase from their collective 418,045 vehicles (65.1%) in 2022. Meanwhile, the non-national makes also registered a 6% year-on-year sales volume to 237,860 vehicles (compared to 224,112 in 2022).

As for electrified vehicles (or xEV), they accounted for approximately 5% of TIV and is on a growth trend. Sales of xEV vehicles had a significant increase of 69% (from 22,619 units in 2022 to 38,214 units; comprising 10,159 units of BEV and 28,055 units of hybrid vehicles).

MAA forecasts that this year will see continued market demand and interest for xEV vehicles due to government support to promote their use. As a result, Malaysians can expect more new xEV models and brands to be introduced here. Granted MAA’s forecast only includes projection figures of its members and not non-member brands.

On the Commercial Vehicles side, year-on-year sales growth was comparatively lower at 2% (80,571 units in 2023 vs 79,020). The growth is mainly due to an increase in demand as businesses began to invest in anticipation of a more stable environment after the formation of the Unity Government post GE-15.

Overall on a year-on-year basis, except for April and June, monthly total vehicles sales were consistently higher in 2023 compared to the corresponding month in 2022. From May 2023 onwards, the TIV repeatedly recorded over 60,000 units on a monthly basis. Besides that, there were 4 months where the monthly TIV exceeded the 70,000 mark. Correspondingly, the total industry production (TIP) of new vehicles in 2023 increased by 72,325 units (10%) to 774,600 vehicles (compared to 702,275 in 2022).

Likewise, TIP also hit an all-time high, and is the 2nd consecutive year it had exceeded 700,000 units to meet the corresponding demand.

However, MAA setting a conservative forecast for 2024. TIV is expected to reduce to 740,000 vehicles (from 799,731 in 2023). The passenger vehicles segment is projected to slide 7.4% down to 666,000 vehicles (from 719,160 in 2023), while sales of commercial vehicles is expected to decrease 8.2% to 74,000 (from 80,571). This is after taking into account various economic and environmental factors such as:

• At this moment, the global economy outlook remains largely uncertain brought about by the conflicts between Israel-Hamas and Ukraine-Russia, as well as other geo-political tensions.
• The International Monetary Fund (IMF) had forecasted that global economic growth would slow from 3% in 2023 to 2.9% in 2024.
• However, the Malaysian economy is expected to expand at 4 – 5% this year, driven by the continued expansion of its domestic consumption.
• Improvement in the supply chain
• Expected new models launches including many new Electrified Vehicles (xEV) at affordable and competitive prices will help sustain buying interest among consumers.
• Bank Negara Malaysia (BNM)’s decision at its Monetary Policy Committee (MPC) meeting on 2 November 2023 to keep the benchmark Overnight Policy Rate (OPR) at 3% will help stabilise consumer sentiment as borrowing cost remains unchanged.
• Consumer spending may slow down due to concerns over targeted subsidy rationalisation, higher cost of living, implementation of proposed High Value Goods Tax, and higher service tax rate for some services including motor vehicles repair and maintenance.