MAA predicts that the total industry volume (TIV) for this year will remain at the “planned level” as it said demand for commercial diesel vehicles, pickup trucks and vans is still high.
“We believe that while consumers will be cautious when deciding whether to buy diesel vehicles at first, they cannot hold off on such purchases as they (diesel vehicles) are still necessary,” the industry body said in a statement.
In January, MAA forecasted a TIV of about 740,000 for 2024, a 7.8% decrease from the record 799,731 new passenger and commercial vehicles sold in 2023.
It said the lower forecast was due to the largely uncertain global economy, and highlighted the ongoing Israel-Hamas and Ukraine-Russia wars, alongside other geopolitical tensions.
Today, it said that although diesel-powered commercial vehicles play an essential role in the country’s economic activities, diesel vehicles account for less than 12% of vehicles nationwide, and the subsidy removal will have a minimal impact on overall TIV this year.
Mixed expectations from vehicle salesmen
The diesel subsidy in Peninsular Malaysia was lifted on Monday, with its price rising from RM2.15 to RM3.35 per litre. The Budi Madani programme provides monthly aid of RM200 to selected vehicle owners and businesses to offset the higher pump prices.
The RM3.35 per litre rate is the unsubsidised market price for diesel based on the average for May. The diesel price will be reviewed every week.
Several diesel vehicle salesmen FMT interviewed had mixed reviews on whether the 55% hike in the price of diesel will dent their sales numbers. While some said it would result in a decrease in demand, others said it was too early to tell.
“We have to give it one or two weeks before we know whether the increase in the price of diesel will affect the market (for diesel vehicles),” said a Nissan outlet manager.
A Toyota salesman also said he was unable to predict whether the hike in the price of diesel will result in lower sales, adding that he had no data on the matter.
Meanwhile, a salesman from Ford said he estimated a 50% decrease in numbers.
“There will be an impact, I’m sure sales will drop,” he said.
Yeo Mei Yee, a sales consultant at an Isuzu dealer in Kuala Lumpur, said potential customers have been discussing the increase in the price of diesel with her.
“It will affect sales slightly,” she said when asked whether she expects lower sales of diesel vehicles.
Karnesh Subramaniam, a service manager at a Mitsubishi dealer, said he expects to see a 20% drop in diesel vehicle sales.