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Frost & Sullivan forecasts local auto sales to rise by 3.15% this year

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Our local car sales are expected to see a slight improvement for 2015 with a growth of 3.15% to 685,950 units year-on-year, forecasted by Frost and Sullivan.

During the company’s presentation recently, its senior partner, Kavan Mukhtyar said that the steadily decline in global fuel prices would lead to higher sales in the first quarter of the year. He further adds that high demand for the Perodua Axia and Proton Iriz will likely to contribute towards our local car sales growth this year.

The high back orders in 2014 from Perodua Axia and Proton Iriz are likely to support vehicle sales growth this year,” said Mukhtyar. He added that mass-market vehicles such as small and compact car (A-segment and B-segment) would see higher growth due to various factors which increased the cost of ownership of vehicles as well as stricter loan approvals.

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“The fuel price volatility, GST (Goods and Service Tax) and cost of living will have an impact on ownership of cars.

“Automotive spending is considered as discretionary and customers may buy the vehicle at one notch lower. Consumers would likely to move to fuel-efficient and compact segment,” Mukhtyar said.

“There would be more growth pressure on the multi-purpose vehicle (MPV) and SUV segment,” he added.

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Nonetheless, Mukhtyar believed the implementation of GST would reduce the price of cars between 1% and 3% especially for the mass-market vehicle model while the more premium model could go up slightly by 1%-2%.

Apart from that, car manufacturers would be looking for opportunities in the energy-efficient vehicle (EEV) sector as the market had a lot of growth opportunities and to take advantage of the Government’s benefits and incentives for the segment.

In 2014, Honda became the largest non-national carmaker in the passenger car segment with market share of 13%, aided by the launch of Honda City and Honda Jazz. Meanwhile, Toyota increased its market share by 1.7% points to 12.3% due to positive response to its new Vios and Corolla Altis models.

Source: The Star