Consumers have been reluctant to spend on new cars due to the prevailing economic situation in the country, especially the escalating cost of living.
The auto industry had set a target of 590,000 vehicles for this year, but it is still short of 68,000 vehicles to reach the target with less than two weeks to go.
This will be the second time in two years that fewer than 600,000 vehicles have been bought by Malaysians, The Malaysian Reserve (TMR) reported.
“It would be a tall order for the sector to achieve the total industry volume (TIV) forecast. However, the chance is still there, given the year-end promotion drive among car brands,” TMR quoted Malaysian Automotive Association (MAA) president Aishah Ahmad as saying.
However, she said the slowdown had hit not only auto sales, but also the housing sector.
“Some industries are affected this year, for example, the housing sector. Hence, the demand for commercial vehicles like lorries is also affected,” she was quoted as saying.
In 2010, the sector met the TIV target for the first time with 605,156 units sold. Last year, 580,124 units were sold, a 13% year-on-year (YoY) drop compared with 2015, marking its first decline after experiencing four years of growth YoY from 2012.
The highest TIV recorded was in 2015 with 666,674 units.
The report said it was probably the commercial vehicle segment that was dragging the TIV number in 2017.
TMR quoted Aishah as saying: “Consumers have been very cautious in expenditure, and companies are thinking twice to invest in big-ticket items. High purchase loan applications are also becoming more difficult to get approvals.”