Thursday 28 Mar 2024
By
main news image

KUALA LUMPUR (March 24): Auto players may be forced to raise prices due to the weakening ringgit, says the Malaysian Automotive Association (MAA), adding however that the move could affect their market share.

"Nobody wants to do business without making money, so they have to increase their price because of the exchange rate," said MAA president Datuk Aishah Ahmad.

She said companies that dealt with completely built-up (CBU) vehicles and completely knocked-down (CKD) parts mostly pay in US dollars or yen, and they are badly affected because of the weakening of the ringgit.

The average US dollar-ringgit exchange rate for this month is 4.4435, up 9.21% compared with 4.086 during the same period last year.

In the case of the yen, the average rate for this month is 3.9089, up 8.51% against 3.6024 a year ago.

Speaking to reporters after MAA's annual general meeting today, Aishah said the decision whether to raise prices was a difficult one.

"If you don't increase the price, you do not make as much money and some could be in the loss-making position. But if you increase the price, you may lose market share. So it's a chicken and egg situation," she said.

Aishah added, however, that the industry had gone through such situations before.

"In seven, eight and nine years, you would see it going down, and then it goes up again, so we are used to it. In this industry, we know this will always happen, and it is not forever," she said.

On 2017 vehicle sales, Aishah said MAA is maintaining its earlier forecast of 590,000 units, which represents a 1.7% growth over 2016.

"Our forecast remains for now. We are forecasting a marginal increase of total industry volume (TIV)… not based on just one month's performance.

"We will look at it for six months, and (in) beginning of July, we will reforecast. We are still maintaining the forecast for 590,000 units," she said.

Aishah reiterated that the outlook for 2017 is challenging with the uncertain economic situation both at home and abroad.

"The consumer confidence is still not there, and at the same time, we have the difficulty of getting approvals for new motor vehicle hire purchase loans from Bank Negara Malaysia.

"It is still very stringent, so that is not enabling us to register as many cars (as before)," she said.

 

      Print
      Text Size
      Share