So the full-year auto sales figures for 2015 are out, courtesy of the Malaysian Automotive Association (MAA). On the face of it, 2015 was a record year with total industry volume (TIV) – really, that’s slang for the total number of cars actually sold – hitting 666,674 units, an all-time high.
Then again “all-time high” is relative and doesn’t tell the whole story. The previous all-time high was 2014 with 665,675 units, so the new all-time high mark is just 999 units more. The context? A challenging market where people are coping with rising costs almost everywhere, leaving increasingly little money (and probably desire) to buy fancy new cars.
That consideration surely puts a different light on things, although the fact that the sector is able to push the TIV bar higher is quite something on its own.
Never mind that car brands had to slash their own margins to keep sales going, hurting profitability as seen via Minister of International Trade and Industry Mustapa Mohamed’s disclosure to Parliament in November last year that car prices on average have dropped 17.3% since 2013.
At least sales volume numbers kept up, right?
In any case, auto enthusiasts – the type that gets titillated by statistics, mind you, not tuning and that sort of thing – would notice at least a couple of things in the 2015 numbers.
First, most Malaysians still prefer non-national carmakers. The market share breakdown remains in favour of non-national brands, who can boast 52.7% collective market share based on TIV in 2015.
Recall that 2014 was the first time in memory that non-nationals overtook national marques in taking majority market share. That year Proton and Perodua, our two national car brands, only made up 46.8% of total TIV compared to 53.2% by non-nationals collectively.
One driving possibility of course is that as people become increasingly able to afford non-national car brands, which are generally priced higher than national marques, they prefer something other than Proton or Perodua.
With sales tipped to fall in 2016 amid increasingly uncertain economic outlook both for the government and corporates as well as the average man on the street, will car purchasers return to Perodua and Proton in interest of paying cheaper upfront? That’ll be something to watch out in coming statistical releases from MAA.
That of course brings us to a second observation: considering national carmakers managed to claw back a bit of lost market share in 2015, Perodua is single-handedly leading the charge on behalf of the national marques camp.
That, of course, is a technicality. Perodua managed to grab 32% market share in 2015, up 2.7 percentage points (ppt) year-on-year, while Proton saw its slice of the pie shrink by 2 ppt to 15.3%.
In terms of TIV, Perodua saw sales grow 9.1% year-on-year to 213,307 units in 2015. In comparison Proton’s sales dropped 11.8% year-on-year to 102,175 units.
Bear in mind that Perodua is expected to roll out its first ever sedan offering this year, its first outright incursion into the sedan category that is widely seen as its older sibling Proton’s territory.
Therefore this year it will be interesting to see how Proton, which once monopolised the car market with nearly three-quarters market share, copes with the latest onslaught from Perodua.
Already its own smaller-car offering Iriz is being compared to Perodua signature model Myvi. Its plan to raise prices after Chinese New Year in early February may hurt its sales volume although financially it remains to be seen how margins are affected either way.
And Proton shouldn’t just look towards Perodua – it would also do well to keep an eye on the non-nationals snapping on its heels in market share. MAA numbers indicate that Toyota and Honda each carved out over 14% market share in 2015, very close to Proton’s own 15.3%.
That means both are practically breathing down Proton’s neck and it will not take much further market share retreat on Proton’s part to see it fall behind either Toyota or Honda by December.
Or, heaven forfend, fall behind both. Will the Suzuki tie-up that among others saw all Suzuki dealers nationwide become Proton dealers give sufficient boost to Proton’s fortunes this year? Yes or no, it’ll be an interesting year for Proton for sure.