KUALA LUMPUR (Nov 3): Hong Leong Bank Bhd expects car sales in Malaysia to rise next year as the country's goods and services tax (GST) "works its way through the system".

Hong Leong Bank group managing director Domenic Fuda said today the GST, which was implemented in the country since April 1, 2015, had hurt car sales, which led to less demand for car loans.

He said there was an increase in car loans prior to GST implementation, but the figures saw a slowdown after the consumption tax was imposed.

“This year (2016), we are seeing a (general) slowdown in car sales, but next year, we are hoping to see a small increase, perhaps in the
mid-single digits.

“As (GST implementation) works its way through the system, we are going to see some year-on-year growth (for car sales in calendar year 2017),” Fuda said.

He was speaking to reporters here today at the launch of Hong Leong Bank's online auto loan application platform, which is known as “Loan2Go”.

"We have moved from the traditional deskbound processes and office hours limitations which result in a (move from) more time consuming end-to-end process to a shortened process of two hours through the Loan2Go platform," said Fuda.

At 3:22pm, Hong Leong Bank shares fell two sen or 0.2% to RM13.10 for a market value of RM26.86 billion. The stock saw 74,000 shares traded.