KUALA LUMPUR: Sales of new motor vehicles in 2023 rose 11 per cent to a new all-time high, surpassing the record in 2022 when it hit 721,177 units.
According to the Malaysian Automotive Association's (MAA) report, 2023's Total Industry Volume (TIV) or vehicle registrations increased to 799,731 units.
Last year's industry sales growth marked the second annual gain since the downturn in 2020-2021 caused by the Covid-19 pandemic crisis.
It was also the second consecutive year the TIV exceeded the 700,000 units mark.
MAA attributes 2023's stellar performance to the passenger cars sub-segment, amid a resilient domestic economy and a more stable socio-political environment.
Factors include the fulfilment of tax-free car bookings registered before March 31, 2023 - a fair number of which were carried over and registered after the mentioned date.
Another is a much more stable socio-political environment following the formation of a Unity Government post General Election 15 which led to a more resilient domestic economy.
Lastly, TIV was driven by competitively priced new model launches and a much improved 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 MAA president Mohd Shamsor Mohd Zain.
Both the passenger vehicles and the commercial vehicle segments registered growth in sales.
Total registration of new passenger vehicles in 2023 rose to 719,160 units from 642,157 units in 2022.
This was an increase of 77,003 units or 12 per cent.
The high volume increase was largely due to the strong sales performance by the two national makes.
As a result, the combined market share of both national makes (within PV segment) rose to 66.9 per cent (481,300 units) in 2023 compared with 65.1 per cent (418,045 units) in 2022.
Meanwhile, the non-national makes registered a higher sales volume of 237,860 units or six per cent growth compared with 2022 with 224,112 units.
Electrified vehicles or xEV accounted for approximately five per cent of the TIV, showing a continued positive momentum for its demand.
The xEV sales jumped by 69 per cent from 22,619 units in 2022 to 38,214 units, with 10,159 units of BEV and 28,055 units of hybrid vehicles.
The commercial vehicles segment registered a small growth of two per cent or 1,551 units to reach 80,571 units.
The improvement in sales of commercial vehicles was due to increasing demand as companies began to invest in anticipation of a much more stable environment after the formation of the Unity Government post GE-15.
On a year-on-year (y-o-y) basis, except for April and June, the monthly total vehicles sales were consistently higher in 2023 compared with similar corresponding month in 2022.
From May 2023 onwards, the TIV repeatedly recorded a monthly TIV of over 60,000 units.
On top of that, there were four months where the monthly TIV exceeded the 70,000 units mark.
The total industry production (TIP) of new vehicles in 2023 increased by 72,325 units or 10 per cent to reach a total of 774,600 units compared with 702,275 units in 2022.
Similar to TIV, this was an all-time high TIP and the second consecutive year the TIP exceeded the 700,000 units mark. This big increase in production volume was in tandem with the higher overall sales in 2022.
For 2024, MAA believes that xEV demand and interest will continue to grow at the back of the government support to promote its use and with more new and exciting xEV models being introduced.
That said the association is cautious with its 2024 TIV forecast given the many uncertainties at play after taking numerous economic and environmental factors into account.
This includes the global economy outlook, which remains largely uncertain and exacerbated by the on-going conflictbetween Israel-Hamas and Ukraine-Russia along with other geo-political tensions.
The International Monetary Fund (IMF) forecast that global economic growth would slow from three per cent in 2023 to 2.9 per cent in 2024.
Consumer spending may also slow down due to concerns over targeted subsidy rationalisation, high cost of living, implementation of proposed high-value goods tax, and higher service tax rate for some services including motor vehicles repair and maintenance.
Sales in January 2024 is expected to be slightly lower than the December 2023 level.
TIV for Dec 2023 was seven per cent higher than Nov (at 73,242 units).
Year-to-date sales volume was also 11 per cent higher than in 2022 with companies ramping up delivery of vehicles to fulfil backlog orders especially for companies with financial year ending December 2023 and year-end bargains.
On an optimistic note, MAA says that the Malaysian economy is expected to expand at 4-5 per cent this year, driven by the continued expansion of its domestic consumption.
A much improved supply chains plus on-going new models launches including many new EVs at affordable and competitive prices, will entice and sustain buying interest among consumers.
Bank Negara Malaysia (BNM)'s decision at its Monetary Policy Committee (MPC) meeting on Nov 2, 2023 to keep the benchmark Overnight Policy Rate (OPR) at 3 percent, also bode well for the industry as loan borrowing cost remains unchanged.