Speaking at a media briefing, MMA president Aishah Ahmad said these factors, which would affect consumers and car companies alike, would hit local players the hardest as those in the luxury vehicle market had the money to buy their products.
In a report by The Edge financial daily, she said car sales were expected to decline this year, with Perusahaan Otomobil Kedua Sdn Bhd (Perodua) and Proton Holdings Bhd likely to be the most affected.
Factors such as high household debt levels would complicate things further, she added.
According to the report, MAA targeted sales volume of 590,000 for 2017, but only 576,635 units were sold. It was the second year in which sales did not meet the set target.
A total of 499,639 vehicles were manufactured last year, an 8.4% decline from the 545,253 units produced in 2016.
For this year, MMA has set a sales target of 590,000 units.
Aishah said despite Malaysia’s economic recovery and the aggressive promotional campaigns undertaken by MMA members, sales had remained flat last year.
“This can be attributed to the inflationary pressures affecting consumers’ disposable income, which consequently resulted in cautious consumer spending,” she was quoted as saying.