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Rise in Vehicles Sales in Malaysia
Nov 19, 2007

The Malaysian automobile industry saw growth in September 2007 due to the innovative strategies followed by the manufacturers, and increasing demands from international and domestic market.

MAA (Malaysian Automotive Association) revealed that in September 2007 that the sales in new vehicles showed 4.9% increase form the previous year - its 4th successive monthly rise - in Malaysia. This was due to the high demands for new vehicles introduced in the market by automakers, including the Proton Holdings Bhd. The Star published this news.

MAA also said that the total increase in the automobiles’ sales in September 2007 in the country reached 44,984 units. In September 2007, the total automotive production hiked to 40,660 units. Out of this, 37,356 were the passenger cars.

The chief reasons that pushed the production of the automotive sector in Malaysia are high demand for commercial and passenger vehicles from local as well as foreign markets. Also, the manufacturers of large equipments are setting up production facilities in developing markets and are sourcing the parts from those suppliers who are situated nearer to these markets, thus boosting the growth in the auto market.

The technologies and strategies applied by the manufacturers are also increasing the Malaysian vehicles’ demand in and outside the country. Domestic production of fast and attractive vehicles is also luring the young consumers, thus fuelling growth in the market.

The country’s increasing disposable incomes and low level of unemployment has further pushed up the Malaysian people’s spending on automobiles. Malaysia’s Department of Statistics revealed that in September 2007, the country’s consumer prices profited 1.8% YOY- almost same as the 1.9% gain seen in the previous month in 2007.

Other reasons that contributed to the growth of the automobile sector in the country are the presence of skilled human resources with strong engineering background at reasonable costs, and increasing demands. Again, due to this, good designs, productions, as well as testing facilities came up in Malaysia.

Also, the banks in the country, seeing the boost in the sector, have decided not to make any changes in the standard interest rates and keep 3.5%.

A Senior Research Analyst at RNCOS said, “The Automobile industry in Malaysia has shown steady growth. This growth is due to the innovative strategies followed by the auto manufacturers. But there are no foreign investment policies in the country’s auto sector, and this makes the government support all the more important for the sector. Therefore, the government should introduce foreign investment policies that will further boost the automotive sector of Malaysia”.

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