However, the end of the APs was supposed to be in 2010 but was repealed based on objections from stakeholders of vested interest and extended to December 31st, 2015. However in December 2015, the Malaysian government announced that the Open Approved Permit (Open AP) policy will be retained with amendments made to improve the system.
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Best Prospects for U.S. Exports
The Malaysian automotive sector experienced its first slump in 2016 after six years of consecutive growth in the automotive sector. This downturn is due largely to cautious consumer sentiment on the overall market’s strength, the tight lending conditions and the weak ringgit exchange rates. To combat these, most auto marques are offering incentives such as longer warranty periods, accessories and rebates to boost sales. Competition is keen, and most brands are setting up 3S (Sales, Service, Spares) Centers and most recent 4S (Sales, Service, Spares and Spray) to cater to their customers.
The above have a repercussion on the used car segment. Used cars use to have at least a 30% price advantage over the new model but with the falling prices of new cars, this segment is also facing an uphill battle to attract buyers. A sub-segment of the used car that has been increasing is the re-conditioned cars. Reconditioned cars are refurbished used cars imported from overseas (typically from other right hand drive markets like UK and Japan), and sold via parallel importers. In Malaysia, regulations limit them to a maximum age of five years old. Although not having the manufacturer’s warranty and having their control labels and instructions in a foreign language, most buyers are willing to overlook such inconveniences for a cheaper price.
Market Trends & Demand
Aftermarket Summary
The automotive aftermarket is witnessing some changes, with online retailing slowly but steadily penetrating this sector. Consumer reliance on technology has prompted aftermarket service providers to broaden their range of offerings. Aftermarket accessories are making their presence felt as these are the easiest to install with minimum alteration to the vehicles. However, these are by no means a disruptive selling point in the automotive aftermarket sector as some of these accessories do require technical expertise to be properly installed for maximum performance.
Electric Vehicles Market Summary
The main barrier to adoption of EV in Malaysia are limited numbers of models, vehicle range, infrastructure, battery degradation and cost. Hybrid vehicles are already readily available in Malaysia however the cost of owning one is still high compared to the internal combustion engines. Fuel cost is still low that most consumer will not consider a hybrid unless mandated. The anxiety of drivers that
market trends