Car sales in Malaysia are expected to recover with a predicted growth of 1.8%, according to BMI Research.
The research facility is expecting a subtle recovery in sales of passenger car next year as the economic condition in Malaysia gradually on the rise, and the negative impact of the goods and services tax (GST) decreases.
“The stabilising inflationary outlook and accommodative monetary policy will further contribute to the recovery, which will help bolster private consumption and support growth in the new car market,” said BMI Research, which is a unit of Fitch.
The research facility stated the main contributor in the recovery of new car sales will be a rise in economic activity driven by the stabilisation of oil prices.
It said its oil and gas group expects that oil costs will get in the years ahead, and figures Brent to normal at US$55 per barrel in 2017, up from an expected US$45.5 per barrel this year.
As Malaysia is a significant net exporter of condensed characteristic gas (LNG), making up around 7% of the GDP, BMI Research expects the recuperation in oil costs to convert into a 4.7% extension in genuine GDP development in 2017, up from an expected 4.1% in 2016.
“We expect this ascent in financial development will prompt to an uptick in purchaser trust in 2017 and, as a result, a progressive ascent in spending on first-class things, for example, new auto buys,” it said in a report yesterday.
It included that the mix of a stable inflationary environment and accommodative money related approach will ease weight on family and business spending plans and enhance shopper’s capacity to bear the cost of vehicle financing.
“Finally, we believe that the negative effects of the GST will subside in 2017 and this will in turn support an uptick in discretionary spending.
“We expect the effects of the GST will have worked its way through the economy by 2017, with consumers pricing it into their purchase decisions, thereby aiding the recovery in car sales in the year ahead,” BMI Research said.