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Car sales to be boosted temporarily by Raya campaigns

KUALA LUMPUR: Vehicle sales are set to be higher in May and June, boosted temporarily by Hari Raya promotional campaigns, but in the longer run the automotive sector will still be challenged by external and domestic economic uncertainties, says AmBank Research.

Sales would likely be higher during the two-month period on rebates, free gifts and other incentives offered to attract buyers, it said.

“We believe the promotional campaigns for the festive season in May-June 2019 will be similar to the tax holiday in 2018, providing a temporary boost to vehicle sales.

“This festive period is seen as an opportune time for car manufacturers to clear and reduce their inventory to a healthier level as newer models will be launched in the latter part of 2019 and in 2020,” it said in a note.

The research house said challenges remained in spurring consumer spending for big-ticket items such as cars despite a slightly more attractive hire-purchase financing rates due to the recent overnight policy rate cut.

“We believe a stronger growth in vehicle sales will ultimately depend on higher wage growth and improvement in economic conditions to lift households’ confidence levels,” it said.

It noted that both the Malaysian Institute of Economic Research’s consumer sentiment and employment indices eased for the first quarter of 2019. — Bernama

Source: TheStar