East meets west as Malaysia’s car industry takes off

Having just spent several weeks on holiday in Malaysia, I was fascinated to read an article on the current state of car sale figures in the country. Other than the government pitching Malaysia as the world’s number one holiday destination for 2011, my first stop-over in Kuala Lumpur showed that Malaysia really is on the rise, and I’m not just talking about its economy.

Transportation as a whole is vital and cars are becoming more accessible and affordable thanks to the growth of finance and bank loans. The average wage rarely tops £4.00 per hour, but the amount of new and nearly new cars I spotted was phenomenal. I have to say that badge spotting became easy as most seemed to be the country’s second largest home-grown manufacturer, Perodua. Proton seemed to be struggling against the competition and the majority have been relegated to the local taxis.

Without any figures to hand, I saw more Perodua’s, Toyota’s and Honda’s than any other car make. Mind you, Toyota does have a large majority stake in Perodua which might explain a few things. Still, as manufacturers build more and more plants in the countries they’re selling their cars in, sales numbers are increasing rapidly.

Back to the article, it reports that around 546,000 cars were sold in 2009, and predictions exceed a forecast of 568,000 for 2010.

Malaysia’s automotive total industry volume (TIV) grew 19.8% in the first half of 2010 with an increase of 16.3% predicted over the next two years. This seems to be due to local manufacturing plants being able to reduce overall building costs whilst importing is virtually now nonexistent.

Toyota for example has a 40% local content rate with their Vios model something both Proton and Perodua can’t seem to match. As a result, Proton is considering closing both of its local plants and consolidating its manufacturing into one large new factory. As for the numbers, the Malaysian Automotive Association (MAA) figures show Toyota sold 34,943 units in the first half of 2010; Proton shifted 67,770 whilst Perodua sold 94,936 compared with 77,045 back in 2009. Nissan rose to 13,406 compared with 11,220 the same time last year.

And it’s not just the A and B-segment cars on the rise. Mercedes-Benz Malaysia confirmed sales rose 29% to 2,417 units for the first half of 2010 from 1,869 previously making it the market leader in the local luxury passenger car segment. The company said that stronger economic conditions had contributed to the rise, which also boosted its C-class sales by 28% (1,097 units). The introduction of its Blue EFFICIENCY range had contributed to MB’s growth in Malaysia whilst the E and S-Class also saw a large increase in sales.

And it’s not just Mercedes seeing a healthy growth. Peugeot were running a heavy advertising campaign too, promoting more franchised dealership plots across the country. What was intriguing to see was the number of new cars parked in people’s driveways. Whilst the wealthy enjoy their fruits, the average population don’t have five-bedroom mansions to show off, but instead raise their families on the bread-line. Yet there would be at least one new-ish car parked outside, something that was hard to fathom considering how they still make do with very little.

Malaysia is clearly on the rise, and very quickly. As much as it is great to see a growing car economy, with lending at an all time high, this is a population that is still coming to terms with its growth. Let’s hope that people avoid debt problems and we don’t start to see a trend that already has its grip on most of us in the West.