BMI's Executive Summary

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The anticipated recovery in Malaysia's new vehicle sales looked unlikely to occur during late 2007. Sales for the year to September showed a 6.3% decline y-o-y to 358,234 units, even though the market has posted monthly increases in sales since June. As a result, BMI has revised its sales estimate for the year downwards, to reflect a 5% decline in sales by year-end, although this in itself is still an improvement from the 11% drop in sales recorded in 2006. We do still expect a recovery over our five-year forecast period, now extended to 2012, as interest rates are expected to stabilise.

The premium segment has been particularly active in the year so far, with DaimlerChrysler revealing record results for the Mercedes brand in H107. This was supported by the news that Danish premium vehicle tuner Kleeman will bring its technology to Malaysia. Kleeman Asia Pacific is a joint venture between Kleeman and its Malaysian partners, which aims to be operational by early 2008. The Danish firm has started its Malaysian campaign with the launch of two upgraded Mercedes models – the E55 and ML500 – which it hopes will achieve a 5% share of Mercedes sales in the country, currently between 3,000 and 4,000 units per year.

Growth in a niche market segment could be just what Malaysia needs to lift it from its current joint 11th place in BMI's Business Environment Ranking for the automotive industry in the Asia Pacific region. Despite the country's economic growth for 2007, which is expected to remain stable over the next five years, a relatively high level of vehicle ownership and lingering protectionist policies go against the market as an investment destination. The political landscape is also tense, following the latest reports of improper use of authority by Malaysia's volunteer security force, RELA. Indeed, Malaysia has already lost investment to neighbouring markets such as Indonesia, due to its business environment.

Major international manufacturers are not entirely deterred from the market, however. Overseas brands claimed 23% of the passenger car market in 2006. Toyota's share of the total market is double that of its passenger car share with 16.7% with Honda pipped for fourth place by local firm Naza on 6.5%, against the Japanese brand's 5.4%. The real battle is between leading domestic manufacturers Proton and Perodua, not only between each other but also against the international presence. Leadership of the market shifted for the first time ever from Proton to local rival Perodua in 2006, although both have seen market shares dwindle. Proton has implemented an export policy to help recover its slide at home, concentrating on other Asian markets and Egypt.

Contents

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Chapter 1 – SWOT Analysis

Malaysia Auto Industry SWOT

Malaysia Economic SWOT

Malaysia Business Environment SWOT

Chapter 2 – Regional Market Overview

Table: Asia Pacific Autos Production – Historical Data & Forecasts (CBUs unless otherwise stated)

Table: Asia Pacific Autos Sales – Historical Data & Forecasts (CBUs unless otherwise stated)

Chapter 3 – Business Environment Ranking

Table: Asia/Pacific Business Environment Ranking

Economics – Long-term Risk

Politics – Long-term Risk

CBU Output Growth

Vehicle Ownership/Penetration Potential

Regulation

Competitive Environment

Chapter 4 – Industry Forecast Scenario

Production and Sales

Table: Malaysia Autos Sector – Historical Data & Forecasts (CBUs unless otherwise stated)

Trade

Table: Malaysia Autos Sector – Historical Data & Forecasts (CBUs unless otherwise stated)

Economic Contribution

Table: Malaysia Autos Sector – Historical Data & Forecasts (CBUs unless otherwise stated)

Chapter 5 – Macroeconomic Forecast Scenario

Table: GDP, Output & Population

Chapter 6 – Special Focus: Commercial Vehicles

Malaysian Total and Automotive Exports, 2001-04 (US$mn and % of Total)

Major Commercial Vehicle Players

Chapter 7 – Competitive Landscape

Market Overview

Industry Developments

Passenger Segment

Table: Malaysia Passenger Car Sales 2005 – Top Ten

Sector Developments

Table: Malaysia Automotive Market Share Jan-July 2006

Chapter 8 – Company Monitor

General Motors Asia Pacific Regional Overview

Table: GM Asia Vehicle Production 2005 (CBUs)

Table: GM Asia Vehicle Sales 2005 (CBUs)

Profiles

Proton

Perodua

Toyota

Honda

Competitive Landscape for Asia Automotives: Sample of  
Companies Ranked

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Rankings and Competitive Landscapes by production and sales; market share and change on previous year; number of employees, ownership structure and year established. Also includes analysis of company expansion, export and investment strategies.

Network of Automotive Sources

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BMI's Asian Automotives Reports are based on an extensive network of multilateral organisations, government departments, automotive industry associations, chambers of commerce and company reports. Information sources include: