Malaysia auto group cuts 2011 sales forecast

KUALA LUMPUR, Malaysia (AP) — Malaysia's auto industry association on Monday cut its 2011 forecast for auto sales to 608,000 vehicles after a disruption in production following Japan's earthquake and tsunami in March.

The Malaysian Automotive Association said sales in the first half of the year fell 1.3 percent to 297,203 vehicles from 301,115 a year earlier. The fall was largely due to a delay in deliveries of new vehicles as production was hit by a shortage of parts from Japan.

The magnitude-9.0 earthquake and subsequent tsunami devastated large areas in northeastern Japan, home to auto parts makers.

The association had earlier forecast sales of 618,000 vehicles this year. Auto sales in 2010 totaled a record 605,156 vehicles.

Association president Aishah Ahmad said stricter hire-purchase laws imposed by the government in mid-June to protect consumers had also dampened sales in the first half.

However, she said sales are expected to pick up in the second half, bolstered by the launch of new models and positive consumer sentiment.

"We are going to lose some sales this year because production cannot cope with demand. However, we are confident that once production is back to normal after August, sales will pick up again," she told reporters.

The association said auto production in Malaysia fell seven percent in the first half. Output at Honda Motor Co. was the worst hit, falling by more than a third from a year earlier while Toyota's production fell 16 percent.

National carmaker Proton overtook rival Perodua to become the domestic market leader for the first time since 2005. Proton sold 85,168 vehicles in January-June to gain a 32 percent market share, followed by compact car maker Perodua with a 30 percent share.

Perodua, which is partly owned by Japan's Daihatsu Motor Corp., is to introduce a new compact car before September that it says will boost sales. The launch of the car was delayed due to supply glitches from Japan's disaster.

Toyota Motor Corp. remained the best-selling foreign car, capturing about 12 percent of the market.

Aishah said Indonesia has overtaken Malaysia as Southeast Asia's largest market for passenger vehicles, which include cars, multipurpose vehicles, small vans and four-wheel-drive vehicles.

In the first five months this year, Indonesia sold 235,467 passenger vehicles compared to 228,816 in Malaysia. Thailand remained the region's largest automotive market with sales of 361,753 vehicles, mostly commercial models.

Aishah said the association, which groups more than 40 auto manufacturers and distributors, has appealed to the government to loosen up hire-purchase laws and scrap old vehicles to bolster sales.

New vehicle sales in Malaysia are spurred largely by owners upgrading their cars, but the weak resale value of used cars has hurt demand for new ones.