This article first appeared in The Edge Financial Daily, on April 15, 2016.

KUALA LUMPUR: Malaysia’s vehicle sales fell 29% in March this year compared with March 2015’s figure, according to Perusahaan Otomobil Kedua Sdn Bhd’s (Perodua) internal data.

Total vehicle volume (TIV) of new motor vehicles in March 2016 dropped to 47,700 units from 67,300 units a year ago, it said.

“Based on our internal research, we can deduce that the decrease in TIV was due to the slower pace of the economy, the increase in vehicle prices by some of the players due to a softer ringgit and the lingering effects of the GST (goods and services tax),” Perodua president and chief executive officer Datuk Dr Aminar Rashid Salleh said in a statement yesterday.

Despite lower sales volume, Perodua’s share of TIV rose to 37.1% in March this year.

TIV for the first quarter of 2016 (1Q16), meanwhile, is estimated to come in at 130,000 units, said Perodua. This would be a 23% decline from 168,306 units recorded in 1Q15.

Perodua said it captured 36.3% of the estimated TIV of 130,000 in 1Q16 led by its latest bestselling model, the Perodua Axia, maintaining its pole position since 2006 when it overtook Proton Holdings Bhd to become the top-selling carmaker in the country.

However, Aminar stressed that the TIV numbers shared were based on Perodua’s internal research, and are subject to the official figures from the Malaysian Automotive Association.

Meanwhile, Perodua said its sales for March 2016 amounting to 17,300 unit was 22.8% less than the 22,400 units it sold a year ago.

It also saw a 17.4% decline in its car sales to almost 47,200 units for 1Q16, from 57,200 units registered in the same quarter last year.

Aminar said Perodua had registered higher sales in 1Q15, due to the pre-GST buying rush by consumers before the consumption tax came into force on April 1, 2015.

As for its aftersales business, the compact carmaker saw 515,343 intakes for 1Q16, a 7% increase from 481,627 intakes in 1Q15.

Revenue from parts including accessories rose 4% to RM65 million in 1Q16, from RM62.5 million a year ago.

Perodua also produced a lower number of cars in 1Q16 of 48,300 against 60,100 units in 1Q15. It attributed the lower production to some carry-over stock from 2015,  as well as the slower pace of the economy in the first quarter.

On exports, Aminar said the carmaker will gradually increase its numbers, particularly with the recent launch of the Myvi and Alza in Brunei.

“For 1Q16, we have exported 1,600 vehicles to six countries, which is an increase of 55.8% from 1,030 vehicles in the same quarter last year.

“We aim to steadily grow our regional reach as we further improve our operations to become globally competitive,” he said.

However, Aminar said the impact of a stronger US dollar to the ringgit and the company’s sales volume mix continue to be a big challenge when it comes to meeting profit targets.

“While we are glad to improve our market share, a bigger ratio of our sales is coming from the lower variants of our models, which enjoy smaller margins, hence the impact on our bottom line.

“Going forward, while there seems to be signs of economic improvement with the increase in prices of crude oil plus the strengthening of the ringgit against other currencies, and in particular the US dollar, we are of the opinion that it is still too early to be optimistic,” said Aminar.

He said the company will continue to monitor the situation, but at this point it is cautiously optimistic that it will be able to achieve its key targets, particularly the sales target of 216,000 units by year end.