MALAYSIAN AUTOMOTIVE ASSOCIATION PRESS CONFERENCE 24 JULY 2017 MARKET REVIEW FOR 18" HALF 2017 COMPARED TO 18" HALF 2016 EMBARGO: Not for publication or broadcast before 11.00 am on Monday, 24 July 2017[MAA PRESS RELEASE ON 1°" HALF OF 2017 MOTOR VEHICLE SALES AND PRODUCTION PERFORMANCE {Good morning [MAA Vice Presidents, Council Members, Members of the Pres, Ladies and Gentlemen, Fiesty, lat me wish our Muslim colleagues and fends “Selamat Harl Raya All Ft, ‘Maaf Zehir & Betin”. Hope you had a peaceful, meaningful Hari Raya and a relaxing Raya break. Thank you for your presence here this morning where we wil review the sales and production performances of new motor vehicles forthe fist half of 2017. BUSINESS ENVIRONMENT ‘According to the Intemational Monetary Fund (IMF, the global economy expanded 13.2% Inthe fst quarter of 2017 compared to 2.4% during the frst quater of 2016. Back home, the Malaysian economy rgistereda strong growth of 5.6% during the fst ‘quarter 0f 2017, which was the highest in two years (GDP in 102016: 4.1%). This strong trowth or the ist quarter of 2017 was mainly contributed by private consumption and Investment which both grew solidly by 6.6% year-on-year and 12.9% year-on-year The Organisation for Economic Co-operation and Development (OECD) in its latest Fconomic Outlook report (lune 2017) has projected that the global GOP growth Is. expected to increase from 3% in 2016 to 3.5% in 2037. This positive economic projection augurs well for our country glen that Malaysia Is one of the bigest trading nations in the word.Figure: Malaysia eal GOP growth; by quarter Malaysia Quarterly GOP 50 45, 4a 40 i 40 30 20 10 00 1QTR2016 20TR 2016 3ATR2016 QTR 2016 10TR 2017 Aecordingto the latest surveys conducted bythe Malaysian Institut ofconomicResearch (ome), Mataysian manufacturers are highly optimistic about the year ahead but consumer sentiment however renained weak despite light improvement. ‘The Business Conditens survey stated that Malaysian manufacturers were upbeat entering into the frst quarter of 2017, ith the MIER Business Conditions Index (BC) registering 112.7 points during the quarter Its highest in the past 10 quarters. The index rose by 315 points in the 102017 (compared with 8.2 point in the 402016), reflecting ‘optimism towards the economic entonment In 2017. |While the Consumer Sentiment index CSI) stood at 76.sin the fist quater of 207, gaining 6.8.and 3.7 points quater on quarter and year on year respectively age 12‘The authorities have yet to announce the second quarter 2017 growth rate. Many analysts as well asthe Government feels the economy ison track to register higher growth in 2017. However, as of now Bank Negara is maintaining its full year forecast range of 43 to 4.8 percent fr 2017 Fg. 2: Business Conltions index by quarter ‘pp Bel : threshold pa a s a z 2 & & 5 ® a ® & ‘moor eet Employment adndex ‘SEnrloyment indo —=Gensumr Sentimonts ndeTOTALINDUSTRY VOLUME ‘The Total Industry Vlume (WV) of new motor vehicles restored in Malaysia in the frst sk months of2017 was284,461 units agalnst 275485 units estered nthe corresponding period of 2016. This was an increase of 8578 units or 3.3% compared with the fst sx months 02016, “Table 1: IV 142017 versus 142016 ‘VARIANCE TANAUNE | JANIUNE [UNS | % 2017 2016 Passenger Vehicles 2ssjmag | 2aaa77 | uaar2 | a7 ‘Commercial Vehies TOTAL VEHICLES zeaaca | 275403 | gave | 33 As lusratedin Chart 1 see thenext pagel except for June 2017, the year-on-year vehicles ‘sales trend was consistantly higher forthe frst hal f 2017 compare to same period In 2016. ‘The TIVJune 2017 was bwer than TIV une 2016, This was due tothe short working month In view of Hari Raya festive holidays (hich fll on the last week of June 2017) ‘on a monthly bass, thesales volume fr March 2017 was the highest recorded during the period under review. the TIV March 2017 was 53,738 units, attributed mainly to the longer working month as well as the rush for deliveries by companies having flnandal year ending 31 March 2017.(Chart 2: IV Jan to June 2017 vs 2016; trend by month "70,000 60,000 50,000 20,000 30000 20,000 10,000 Jan Feb Mar Apr | May | tun ssa Twa017 4667 92455 53,718 42,746 50600 50,275, se mvz016 ai589 37874 42202445668 57,362 UL vor oz | sz1x | 102% | 23x | 133% | 25% Mom -aax | sox | 265% | -200n | 124% | 0.0% (On a quarterly basis, the TIV was much higher In the second quarter of 2017 compared ‘tothe rst quater of 2017 (se Fig. 4in the next page). The TIVin 20R 2017 expanded 296 o reach 143,621 urits compared with 140,840 units In 107R 2017. This can be attributed to the Improving consumers’ sentiment and very aggressive promotions and sales campaigns undertaken by MAA members particularly In the ‘month of May and June 2017.‘As seen in Fig 4, the Tv achievedin the second quarter of2017 almost reached the evel ‘of 202016 (143,621 units versus 144,232 units; a dlference of ony 614 units). Fig. 4: TV January to June 2017 & 2016; by quarter rage 6PASSENGER VEHICLES ‘The total registration of new Passenger Vehicles during the fist six months of 2017 was 255,749 units. This sceounte for an 89.9% shate ofthe Total Industry Volume. Fig. Market share by PV and CV; January to June 2017 103% aw | In terms of units the fst six months achievement in 2017 was higher by 1,372 units oF 4.7% compared tothe total passenger vehicles sales rgistored in the same poriod last yea. ‘within the Passenger Vehicles category, Passenger cars and MPV sub-segment recorded, postive growth in sales of 2,670 units and 23,681 units respectively. On the other hand, ‘the Window vans and 4x4/SUV sub-sogment recorded deciing sales of 261 units and 4,728 units respectively rage 17“Table 2:Passenger Vehicles Sales 1" Half 2017 versus 2016; By Sub-Segment ‘YEAR-TO-DATE JUNE ssue-seament ocr ror | 2016 6 owns [9% aces 186,114 | 183,000 | 2670 | 15 Window Vans aass_| a6 | sy | sa) ‘Multi-Purpose Vehicles axos1 | 27,410 | 13681 | 09.9 Four Wheel Drive/Sperts Utility Vehicles axore | 33,797 | (4718) | (148) ‘TOTAL PASSENGER VEMICLES 25549 | 2aaa77 | ian | 47 Fig. 6: Fassenger Vehicles Sales 1" Half 2017 versus 2016, 6,118 By Sub-Segment 83a Pose[Within the Passenger Vehicles category, Passenger car continued to form the biggest segment In fst half 012017 with 72% share, followed by MPV (16%), 4x8/SUV (11%) and Window van (1%), Fig 7: Passenger Vehicles Sales 1* Half 2017 ‘hare by Sub-Segment awo/suv 10% ev ore 16% nw a nev * sawoysuv Pc m6 ‘COMMERCIAL VEHICLES 1 total of 28,722 units of new Commercial Vehicles were regstered In the fist six ‘months of 2017 which accounted for 10.1% share of the Total Industry Volum In terms of units the fst sit months of 2017 achievement was lower by 2,394 units or 7.7% compared to total Commercial Vehicles registered inthe same pertd lst year. Except for Panel Vans which registered an increase of 336 units, all sub-segments of the Commercial Vehicles etegory recorded a decline in sales during the fist half of 2017 {see Table3 inthe following page).In terms of units, the Pick-ups subssegment suffered the biggest decline (1,757 uit), followed by Trucks (861 units), Buses (83 units) and Prime movers (29 units). ‘Table 3: Commercial Vices 1st Half 2017 versus 2016; Subvsegment performance sup seamen eee VARIANCE uns | % Panel Van aga | 4ssz | 336 | 26 Plekoup 19603 | 24360 | (2757) | (82) Truck aor | 7268 | asx) | (12.8) Prime Mover sss | 585 | a9) | 60) Bus zs | am | 3) | easy TOTALCOMMERCAL VEHICLES | 28,712 | 31,206 | (2.394) | (7.7) ‘Within the Commercial Vehicles category, Pickups formed the biggest sub-segment in ‘the frst half of 2017 wth 68% share, followed by Trucks (22%), Panel Vans (7%), Prime Movers (2) and Buses (1%) (See Fig. Bin the next page). Fig. 8: Commercial Vehicles Sales 1 Half 2017; Share by Sub-Segment PM Bus PV ‘tucis 2% 3% 7% | 2%Fig 9: Commercial Vehicles Sales 1* Half 2017 versus 2016 By Sub-Segment 20,000 5,000‘TOTAL PRODUCTION VOLUME Total production volume in the fist hal of 2017 decreased by 2.9% to reach a total of 255,318 units compared to 262,963 units inthe same period last year. The drop in production volume was due tothe cautious stance as well as adjustments made by MAA members to avoid an over stocked position given the soft market conditions. Production of senger Vehicles (PV in the first half of 2017 declined 1.9% to reacha total of 236,464 units as compared to 241,009 units inthe same period last year. Except for MPV and 4ut/SUV sub-segments, the other sub-segments in the PV category recorded a decline n production inthe frst half of 2017. Producton of Commercial Vehicles (CV) inthe first haf of 2017 deciined 18.1% to reach ‘total of 18,54 units 2s compared to 21,954 units inthe same period last year. Except for trucks and prime movers, the other sub-segments in the CV category recorded ectine in production inthe first haf of 2017.“Table 4 Total Production Volume; Jan-Jun 2017 versus Jan—Jun 2016 TE TURE TONERS | oir | “ote raseraervices | aeaee | acne | cases) | ao) Conmercavetier | agase | anase | ago) | wan Tora: vewas aan | aase | ces) | 9 {As shown in Chart 2, except forthe month of February and March, the Total Industry Production (TP) was consistently lower inthe ist half f 2017 compared to same perod in 206. ‘Chart 2: Total Produston Volume; Jan ~Jun 2017 versus Jen ~Jun 2016; by month a Stew) em mar [= m= TP 2016) 46,551 Fob | Mar | Ape aoase | 37,650 35,130 | 47,810 | [May [dun war | 32379 47650 | 40528‘OUTLOOK FoR stCONO HALF OF 2017, We have taken the folowing economic and environmental factors into account in our forecast fr the Tota Industry Volume 2017: (2) According to Bank Negar, the global growths expected to expand a afasterpace {in 2017, supposed by improvements ia both advanced and emerging market economies. While the Malaysian economy son track to register higher growth in 2017. The more favourable global gromth prospects Is expected to lead to a sustained export performance. Ths tun will generate postive spillovers our domestic economy. (2) Continuation ofthe progression ofthe Economic Transformation Projects (ETP) ‘and ongoing large infrastructure as well as development projects like public ‘transport, Tun Razak Exchange (TRX) project, etc wil give further boost to the domestic aconamy and help to create demand for new vehicles. {3} Consumer confidence expected tobe hetter following the improvement the economy, The ise In consumers confidence Is expected to boost vehicle sales. (4) Bank Negara’s recent decision to maintain the benchmark Overnight Policy Rate (OR) at 3% is seen as supportive of the economic acthties and may help to stimulate domestic spn (5) intoduction of new models with latest designs and specications at very ‘competitive prices may assist to sustain buying interest.(6) The trond towards fuel efficient and small engine capacity vehicles is expected ‘o.contine as consumers become more conscious on costs of maintenance and spending, (7) Ongoing and more aggressive promotional campaigns by car companies for the rest ofthe year (8) stringent hire purchase lending rules is expected to continue. For the frst Hf six months of 2017, the TIV achieved was 280,461 units. This was equivalent to 48.2% of the MAR's orignal 2017 forecast of 590,000 units which was announced during the MAA press conference on 19 January 2017 In view of the above economic and envitonmental factors, we have decided to maintain ‘ur original forecast fr 2017 a8 shown in table 5 below: ‘able 5:T1V 2017 versus 2016 7 mie ‘VARIANCE SEGMENT (forecast) | qacruau | uns | % | PassengerVeices | s22,000 | stasis | 7455 | 14% Commercial Vehicles! 65,900 | 65579 | 2an | 3.27% oratvenciss | 590000 | sa0,124 | 9.876 | 17% On the back of a more favourable economic outlook, we believe the automotive Industry shouldbe able to achieve Its T forecast of 590,000 units in 2017,(Our next four years indicative forecast ofthe TI fom 2018 to 2021 is shown in Tobe 6: ‘Table 6: Total Industry Volume Forecast For 2018 to 2021 secMent zis | 2019 | 2020 | 2001 ssenger vehicles 48,000 | 575,500 | 587,000 | 599,300 Commercial vehicles | 73,000 | 75,000 | 76,500 | 78,200 ‘Total industry volume | 612,000 | 650,500 | 63,500 | 677,500 Growth som | sax | 20x | 2x | would now tke to Invite questions fom the members of the press. Thankyou.peluyaotT MALAYSIAN AUTOMOTIVE ASSOCIATION PRODUCTION & SALES FOR JANUARY TO JUNE 2017 psoouenox omen ‘YEAR TODATE JUNE onl se Prodacton 1) aan) aaea| col a Iv Passenae venice) zxeaud)earoo| esas] [pc easenger cant wnua|_wsrel 700] a jw indo vane) wa m 7 PV ut Parone) 2 so00| 7 [sau Four vel Dverspon ily Vie zs zl 28 fav Comat Veh sas ‘5:00 oe fv eaneivans | wa] 0. 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