January 2023 car sales sets a promising pace for the year, 19 percent higher than the corresponding period last year

Despite the record-breaking total industry volume (TIV) achieved last year, the Malaysian Automotive Association (MAA) has lowered expectations a little this year with a reduced TIV forecast of 650,000 units, just under 10 percent lower than 2022.

Despite that, January 2023 vehicle sales have set a solid pace for the year with 49,461 sold that eclipses the corresponding period in 2022 with 41,533 units. This marks a 19 percent increase.

Also Read: MAA: 720k cars sold in Malaysia in 2022, 41% up from 2021; Forecasting 10% less for 2023

Lining up January 2023 numbers against the previous month is an unfair comparison as December sales tend to be much higher with year-end discounts and deliveries rushed for completion whilst being the first month of a new year sees buyers a little apprehensive as they await the market outlook for the year.

For the record, December 2022 sales was an all-time monthly record with a total of 76,657 units registered; meaning January 2023 was 35 percent lower.

Nonetheless, the MAA believes that the figures could have been higher for January 2023 as the shorter working month due to the Chinese New Year festive holidays would have put a damper in sales.

Also Read: Perodua's got a strong start to the year as January 2023 sales up by 23 % Y-o-Y

Furthermore, the shortage of chips and components continues to affect certain makes although the period of delays are shortening.

February being a short month may have you expecting lower sales but this time around the MAA is forecasting sales in February 2023 to be better than January 2023 for two primary reasons:

• a full working month
• fulfilment of bookings made during the SST exemption period

On the topic of a lower TIV for 2023, the MAA has highlighted a number of factors including a reduction in global economy growth based on the International Monetary Fund (IMF) that predicts a drop from 3.2 percent in 2022 to 2.7 percent for 2023.

Nonetheless, the Malaysian economy is expected to grow between 4 to 5 percent in 2023 and that could encourage more car sales.

Secondly would be the introduction of new models, led by EVs within a relatively affordable pricing bracket. The competitive pricing of EVs should entice buyers and account for a larger market share than 2022.

Also Read: Vehicle sales took a hit in January 2022 with a drop of 44 percent but don’t you worry

Working against a rise in car sales was the announcement by Bank Negara Malaysia (BNM) that increased the benchmark Overnight Policy Rate (OPR) by 25 basis points to 2.75 percent with talks of a further increase later in the year as well.

The consequences would be steeper hire-purchase interest rates and that could turn consumers off from purchasing new cars.

Lastly, the automotive industry continues to face supply chain issues such as shortage of semiconductors chips although the situation is improving.

Also Read: Perodua has smashed its 2022 targets of 247,800 units, and set new record for the highest yearly sales, ever