MALAYSIAN AUTOMOTIVE ASSOCIATION PRESS CONFERENCE 21 JANUARY 2015 MARKET REVIEW FOR 2014 AND OUTLOOK FOR 2015 EMBARGO: Not for publication or broadcast before 11.30 am on Wednesday, 21 January 20152014 NEW MOTOR VEHICLE SALES AND PRODUCTION PERFORMANCES Datuk Datuk, Ladies and Gentlemen, ‘Good morning and veleome to the MAA annual press conference. ‘Thank you for your presence here this moming, Today we will announce the 2014 sales and production performances of new motor Vehicles in Malaysia 2014 can stil be considered as a good year fr the Malaysian automotive industry despite Total Industy Volume (TIV) being below our revised forecast of 680,000 Units, The TIV had managed to maintain is upward growth trend albeit at a much slower pace compared to the previous year. (On the whole, the fazourable performance of the automotive industry in 2014 could be attributed to our country’s continued economy growth, stable employment market {and the very agarestive promotional campaigns undertaken by MAA members. The local automotive market had benefited from this positive environment specifically during the first half of 2014, Based on data released by Bank Negara so far, the Malaysian economy had expanded from 6.2% (1% Quarter 2014) t0 6.5% (2 Quarter 2014), However, Malaysia's GDP growth started to slow down to 5.6% during the 3 Quarter 2014, The domestic economy was expected to remain sluggish during the last quarter ofthe year owing to the uncertainties surrounding the global economy and our country’s slewing export growth. The authorities have yet to announce the 4° Quarter 2014 GD? growth rate.FIG t: GDP 2014, by quarter 65 86 ea 2 62 60 5a = 56 | 84 52 amt = aTR2.s aR. ‘TOTAL INDUSTRY VOLUME The sales of new motor vehicles (or Total Industry Volume) in 2014 grew 1.6% to 665,485 units eclipsing the previous 2013 sales record of 655,793 units. This is a new alltime high record achievement forthe local automotive industy. ‘The TIV achioved had been on the upward trend since 2012 when the TIV achieved then was 627,753 units (see Chart 1 below). However the grows rate achieved in 2014 (Le. 1.8%) was much lower than the growth rates achieved during the previous. ‘two years (ie. 4.5% in 2013 and 4.6% in 2012). (CHART 1: TIV TREND FROM 2008 TO 2014 TWormh 206 «HATH OOK aS P63Compared to 2013, the registration of new motor vehicles for 2014 increased by 10,872 unite to regetor a growth of 1.6%. TABLE 1: TIV 2014 VERSUS 2013, Variance Market segment zor | 2013 unis | 9% Passenger vehicles sea,s41 | 576657 | 11684 | 20 Commercial veicles 7a124 | 79,196 | «1012 | (13) Total vehicles 06,465 | 655,703 | tos72 | 16 “The total registration of new Passenger vehicles in 2014 rose to 588,941 units from 576,857 units in 2013. This was an increase of 11,684 units or @ 2.0% ‘growth, However the fotal registration for Commercial vehicles declined to "78,124 units in 2014 compared to 79,136 units in 2013, This means Commercial vehicles sales had deciined by 1,012 units or 1.39% (On a year-on-year (y-o-y) basis, except for Januaty 2014, vehicles eales were consistently higher during the frst sic month of 2014 compared to @ similar period {in 2013. However, the y-o-y TIV started to decine from July til October (see Chart 2.in the following page). As a result, the third quarter of 2014 was the lowest TIV achieved on a quatterly basis (see Fig 2 inthe following page) ‘The market started to turnaround in November 2014 following aggressive ‘promotional campsigns and hard work by MAA members to address the decining ‘eles, As you can cee in Chart 2, the TIV recorded for November and December 2014 were up by agproximataly 6% and 7% compared with similar period in 2013, The lower sales of new motor vehicles from July to October 2014 were due to Consumers taking a walt-and-see stance in anticipation of lower car prices come 41 April 2018. Such consumers’ expectation came about because ofthe frequent“write-ups in the media on car price reductions after the implementation of Goods and Services Tax (GST). This had caused a lower number of vehicles being registered. More stingent approvals on Hire Purchase loans by banks added to the lowering of sales as well (CHART 2: TIV TREND 2014 VERSUS 2013, BY MONTH PEEEEEGE ‘on_mo [ [aoe [or [i [a (aise sam soa | sass | sense |r a Sins | o% kK Gowh Ok 1 2k KOK LH (On a quarterly basis, the TIV for the fourth quarter of 2014 was the highest registering a total sales of 174, 160 units whilst the third quarter of 2014 at 159,163, Units was the lowest TIV achieved on a quarterly basis, “The third quarter 02014 TIV was also lower than the similar comesponding period in 2013 by 15,319 units or 8.6%.FIG. 2: TIV 2014 VERSUS 2013, BY QUARTERS OF sano 175,000 | “The favourable performances in 2014 can be atibuted to following factors: ‘+ A stable economy and employment market + Continuation inthe implementation of a number of infrastructure projects under the Economic Transformation Programme (ETP) which had resulted in better ‘consumer and business confidence as well as generating additional investment opportunities. ‘© Positive consumers’ sentiments and steady consumer spending particularly during the first half of 2014 ‘Introduction of many new models with latest additional specifications, design styles and at very competitive prices. + Innovative and attractive offers and schemes for new car buyers. + Very aggressive sromotional campaigns by car companies. © Tightening of lending guidelines including Hire Purchasing loans to cur household debts.SEGMENT PERFORMANCE Chart 3 below shows the market share of Passenger vehicles (PV) versus ‘Commercial vehicles (CV) out of the Total Industry Volume (TIV) from 2010 to 2014. ‘The share of PV to the total market of new motor vehicles increased slighty in 2014. ‘The Passenger vehicles category accounted for 88.9% of the TIV while the (Commercial vehicles share ofthe market was 11.7%. CHART 3: PV VERSUS CV SHARE OF MARKET, 20102014 wa i x | aRERGEER PASSENGER VEHISLES ‘The total registration of new Passenger vehicles in 2014 was $88,341 units. This was 11,684 units or 2.0% higher when compared to 2013, Within the Passenger vehicles category, Passenger cars continued to form the biggest sub-segment in 2014 with 77.8% share. This was followed by MPVs with a share of 16%, 4WDISUVs (5.2%) and Window vans (19). The share of MPVs had decreased from 165% in 2013 to 16% in 2014, While the 4WDISUVs share Increased from 4.9% in 2013 to 52% in 2014 due the increasing popularity of these, AWIDISUV vehicles. 0.7CHART 4: SHARE OF PASSENGER VEHICLES IN 2014 AND 2013, By SUB-SEGMENT. 2014 Share ofPV Sub Segment ae 2013 Share of FY Sub Segment ono/suv oom Linen “al ‘As shown in Table 2, the Passangor Cars and 4WD/SUVs sub-segments registered higher sales in 2014 compared with 2013. While Window vans and MPVs sub- segments registered lower sales in 2014 compared with 2013. In terms of units, the Passenger cars sub-segment achieved the highest increase with 10,662 units in 2014, This was followed by 4WD/SUVs which achieved an increase of 2,901 units to reach 80,766 units in 2014 compared to 28,485 units in 2013, ‘TABLE 2: 2014/2013 PASSENGER VEHICLES ‘SUB-SEGMENT PERFORMANCE ‘VARIANCE SUB SEGMENT aoa | 2013 | unis | % Passenger car 457,601| 446,939| 10.662| 2.4 Mev on26e| 04,030] 661)| (0.7) 4x4 SUV 30,766] 28.465 2,901] at Window van 5705] 6323| 618) @.8) ‘Total Passenger Vehicles 580,301| 576657| 11684] 20 Pes.COMMERCIAL VEHICLES. A total of 78,124 units of new commercial vehicles were registered in year 2014 compared to 79,136 units in 2013. This was a decline of 1,012 units or 1.3%. All gub-segments cf the Commercial vehicles category registered higher sales in 2014 except for panel vans and trucks sub segments. In terms of units, the Prime movers sub-segment recorded the highest increase in £2014 with 439 units more than in 2013. This was followed by Buses (with an increase ‘of 99 units) and Pick-ups (12 unit) TABLE 3: 2014/2013 COMMERCIAL VEHICLES - ‘SUB-SEGMENT PERFORMANCE SUB-SEGMENT zie | 2013, |_VARANGE uns |_¥% Panel van ase1_| aoa | cm | an Pielcup ss07 | 53608 | 12 | 00 Truck sraat | 19826 | (1486) | 79) Prime mover ves | 1220 | «ao | 357 Bus os7_ | 058 | 99 | 118 Total Commercial Vehdes | 78,124 | 79.136 | (1.012 | (13) Pick-ups continued to form the biggest sub-segment in 2014 with a share of 168.6%. The next biggest sub-segment was Trucks with 22.2%, folowed by Panel ‘vans (6.88), Prime movers (2.1%) and Fussns (1.2%)CHART 5: SHARE OF COMMERCIAL VEHICLES IN 2013 AND 2012, BY SUB-SEGMENT. E18 Share of CV Si-Sagmant 72013 Shore of Sub Sepment 23% Ito ~~ | TOTAL PRODUCTION VOLUME Production of now vohicles in year 2014 recorded a slight drop of 0.8% to reach a {otal of $96,418 units compared to 601,407 units in 2013. ‘This dene in total production volume was caused mainly by the lower production ‘of commercial vehicles in 2014 ‘TABLE 4: TOTAL PRODUCTION VOLUME IN 2014 AND 2013 VARIANCE, ‘SEGMENT zor | 201s uns | % Passenger Vehicles s45,122| saaoz] 1,230 02 ‘Commercial Vehicles si2z08| 71s! @.219)| (10.8) “Total Vehicles 96418] eor4or| (4.908) (0.8) P9310PASSENGER VEHICLES Production of new Passenger Vehicles for year 2014 recorded an increase of 1,290 nits oF 0.2% to reach a total of $45,122 unite as compared to 643,802 units in 2013. ‘The increase was contributed mainly by 4WD/SUVs sub-segment which recorded an increase of 5,233 units or 22.7% whilst the Window vans and Passenger cars ‘sub-segments recorded an increase of 1,206 units and 1,048 units respectively, ‘The MPVs segment recorded a drop in production of 6,255 units in 2014 compared with 2013, TABLE 5: 2014/2013 PASSENGER VEHICLES PRODUCTION ‘SUB-SEGMENT PERFORMANCE VARIANCE ‘SUB SEGMENT zora | 2013 _ unis | _% Passenger Car 427202| 426.tse| 1,048] 0.2 pv @2.779| 99,034] 6255)| (7.0) 4x4 / SUV zeszr| 23094] 5233 227 Window Van esta] 510] 10a) ats s45,122| s43.g02| 1,230] 02 PeatCOMMERCIAL VEHICLES Production of new Commercial Vehicles for 2014 declined by 10.8% to 61,296 units 1s compared to 67,616 units in 2013 Except for Prime Movers and Trucks, all sub-segments of the CV category recorded lower preduction in 2014 compared with 2013, ‘TABLE 6: 2014/2013 COMMERCIAL VEHICLES PRODUCTION UB SEGMENT PERFORMANCE ‘SUB-SEGMENT 2014 2013 — uns | % Panel van 920] 9087] (220) | 402) Pekan nese] s4227| 009 | 07) Tc 19110] 10,00] 008] 55 Prine mover aco 1200) azo] 170 us as| 086] can] can Total commerialvenies | 51206] 7815] (ea1m] (108)OUTLOOK OF THE AUTOMOTIVE MARKET FOR 2015 ‘We have taken te fellowing economic and environmental factors into account in our forecast forthe Total Industry Volume in 2015:- (1) The global economy is expected to moderate owing to number of uncertainties such as the declining crude oil prices, poltcal instabiity in Middle East, te (2) In tandem withthe dectining world economic outlook and weakening ringgit, the Malaysian economy is expected to face greater challenges in 2015, {@) Infation and the impending implementation of the Goods and Services Tax In Aptil are two key conceins affecting consumers at large. (4) Continuation of the Economic Transformation Programme (ETP) projects ‘would contribute to the growth momentum of the local economies and help to spur greater demand for new vehicles, (6) Slowdown in consumers’ spending in light of the economic uncertainties, impact of infletionary pressures, and implementation of the GST. (8) The tightening of lending guidelines including for hire purchase loans by the ‘uthortes in oder to rein in household debts, (7) Aggressive promotional campaigns by car companies. In view of te above, our industry forecast for 2018's as shown in Table 7 below: ‘TABLE 1: TOTAL INDUSTRY VOLUME 2015 VERSUS 2014 wanker seoMeNT 2015 2014 VARIANCE orecasn | wctuay [owns | 9% Passenger Vehicles 600,700 ssaaa1 | 12959) 21 ‘Commercial Vehicles 78,300 rerza | 1476 | 18 “Total Vehicles 680,000 6.465 | 13535 | 20 Peas(Our next four years’ indicative forecast of the TIV for 2016 up fo 2019 is shown in Table 8 below - ‘TABLE 8; TOTAL INDUSTRY VOLUME FORECAST FOR 2018 TO 2018 YEAR zoe | 2017 | 201% | 2010 Passenger Vehicles 613,720 | 27.554 | e41e74 | 657.205 Commercial Vehicles 20500 | 2.000 | 84000 | 88,000 “otal Industry Volume 094280 | 709.856 | 725,874 | 743,205 Growth 2am | 22m | ase | 24% Finally, to our Chinese friends who would be celebrating Chinese New Year next ‘month, I would like tb take this opportunity to wish you “Gong Xi Fa Caf" and hope the year ofthe Goat would bring peace, happiness, prosperity and good health to everyone. | would now lke to ivite questions from the members ofthe press.Table 1 MALAYSIAN AUTOMOTIVE ASSOCIATION PRESS RELEASE : 21 JANUARY 2015 PRODUCTION & SALES FOR JANUARY-DECEMBER 2014 PRODUCTION Segment ‘YEAR-TO-DATE DECEMBER [ot none Production _ | sesatel soraer| 990) co. rv (ossener vrei) sisi] ses] 230| 02 lec paenper car [eran ccsseel soe | 02 | jw dow van) esol 200] ans lev as 2urpove voices) [er] coal 259] [iS aur Whe OveSpat Ly Ven soul 52m [227 lev comarca Vice) xsl (6219) cos fovea vans ss] ser] (220) oa fouievpey naxx] uan| 090] 7a fut Pee Mover) saul azo 220| 173 lows ra] wel anf wey SALES [ot ndury vote _ ss.acs|_oss.7ea|_ioer2| 16 fv Passenger vices ssaani|_oreeer| ssoos| 20 asian] awsose] inese| 24 {nv chow Vast 32 [oa] luv gus Purpose vt _ 42a] seed 2] los (Four hee DverSpors Uti Vehid saree] saat om lev commeria eices) ras] ross cal (vant vans) ase[ asx a] (up up esse a0 facts oa] lure Hower azo ao | 57(Tabie2) eevson2a) ‘ora aaa sy oecunuen nner neve sumaty Bianco(rabie2) SESSSESEESERSEESES i eseeeed § LL 3 shgesenens ¥ na 1 Apdetreeennnnngugteeneeninies-- i SOUEMABItennetataeazacarenaes JF Lmalidhataldtun hothl