With a backdrop of the new all-time high total industry volume (TIV) for the automotive sector in 2023, the Malaysian Automotive Association (MAA) is expecting a downturn for the industry in 2024, forecasting a TIV of 666,000 passenger cars for the year, or 7.4% lower than the previous year.
The industry body says that the lower forecast stems from the largely uncertain global economy outlook, which is further exacerbated by the ongoing Israel-Hamas and Ukraine-Russia wars, alongside other geopolitical tensions. This is reflected in the International Monetary Fund (IMF) global economic growth forecast, which is also expecting a slowdown from 3% to 2.9% in 2024.
Here in Malaysia, the MAA is also expecting a reduction in consumer spending, due to concerns over targeted subsidy rationalisation, high cost of living, the implementation of the proposed High Value Goods (HVG) tax, and higher service tax rate for some services including motor vehicles repair and maintenance.
That said, the Malaysian economy is still expected to expand at 4-5% this year, driven by the continued expansion of domestic consumption. Specifically for the automotive sector, the improved supply chain conditions, and continuous new model launches – many of which being new energy vehicles (xEV) at affordable and competitive prices – will continue to entice and sustain buying interest among consumers.
Coupled with the government’s various incentives for electrified vehicles, MAA believes that demand for xEV will continue to grow this year despite an overall downturn in TIV.
MAA: 10,159 EVs were sold in Malaysia in 2023, almost quadruple from 2022
