Frost & Sullivan calls for strong incentive policy for electric vehicles in Malaysia
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Frost & Sullivan which is “mildly positive” on growth of total industry volume (TIV) for vehicles in 2019, said a strong incentive policy is required for electric vehicles (EVs) to take off in Malaysia. “Currently what we are waiting for is if the (NAP) National Automotive Policy mentions anything about EV. Unless there is a strong policy coming up focused on EV, otherwise we will not see any major uptake in EV sales in Malaysia,” said associate partner and senior vice president of mobility at Frost & Sullivan, Vivek Vaidya.
He said the uptake for EV will also depend on factors such as incentives for manufacturers, forward distributors and customers coupled with the development of infrastructure for charging stations. Vivek added that there is a possibility of the new national car being an EV given leads of it being low energy and technology neutral.
A survey carried out by Frost & Sullivan found that 30% of its respondents were willing to consider EVs even though such vehicles are yet to make a presence in Malaysia, signaling a latent demand for EVs.
On the overall automotive market, Vivek expects Malaysia to registers vehicle sales of 609,700 units in 2019, 1.4% growth against 601,300 units in 2018, driven by growth in domestic consumption, private investments and new model launches.
The passenger vehicle segment is expected to perform better than the commercial vehicle segment, which is likely to be impacted by low public spending.
The passenger vehicle volume is projected to grow to 544,121 units in 2019 from 536,371 units in 2018, while the commercial vehicle volume is estimated to rise to 65,579 units from 64,929 units.
Worth noting is that demand for vehicles went up by 4.2% during the tax holiday period last year.
“Usually after a tax break period, the volume shrinks in the subsequent quarter but in 2018, strong consumer sentiment ensured Q4 volume matched last year figures to end the year on a positive note,” Vivek said.
Questions & Answers
Q.Why is a strong incentive policy crucial for electric vehicles in Malaysia?
Why is a strong incentive policy crucial for electric vehicles in Malaysia?
Without a strong policy focused on electric vehicles, Frost & Sullivan does not expect a significant increase in sales. Uptake also depends on incentives for manufacturers, distributors, and customers, alongside charging infrastructure development.
Q.What is the projected total industry volume (TIV) for vehicle sales in Malaysia for 2019?
What is the projected total industry volume (TIV) for vehicle sales in Malaysia for 2019?
Malaysia is expected to register vehicle sales of 609,700 units in 2019. This represents a 1.4% growth compared to the 601,300 units sold in 2018, driven by domestic consumption and new model launches.
Q.Which vehicle segment is forecast to perform better in 2019, and why?
Which vehicle segment is forecast to perform better in 2019, and why?
The passenger vehicle segment is expected to perform better than the commercial vehicle segment. The commercial sector will likely be impacted by low public spending, whereas passenger vehicle volume is projected to grow to 544,121 units.
Q.Did vehicle sales decline after the tax holiday period in 2018?
Did vehicle sales decline after the tax holiday period in 2018?
No, despite the usual post-tax break shrinkage, strong consumer sentiment ensured that fourth-quarter volume matched previous year figures. This helped 2018 end on a positive note for vehicle sales.
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