Automobile Market Analysis On Car Ownership Economics Essay

The entry of national auto such as Proton and Perodua into local car market has decrease the demand, supply and market portion of other foreign autos such as Toyota and Nissan Malaysia has enforce the high duty of imported autos which encourage more protectionist policy of national autos. Growth in demand for national auto for consumer automotive cause progressively attracts attending by economic system and policy shapers. Harmonizing to Malaysia automotive industry ( MAI ) which is an bureau under ministry of international trade and industry stated that Malaysia has the lowest cost of auto ownership due to its ain advantage of given subsidies fuel monetary values, cheaper revenue enhancement route and insurance premium by authorities. Having the sole right to ain auto particularly Malaysia which has being announce as the 2nd lowest cost of vehicle ownership cause increasing demand of Malayan auto.

Harmonizing to Bernama, it was pointed out that their subsidised RON95 gasoline is RM1.90 per liter much lower comparisons to others ASEAN state Thailand state which cost RM3.80 per liter, in Indonesia RM 3.35 per liter, Singapore RM5.10, Vietnam RM 3.60 and Philippines RM 3.20 per liter. Another comparing is their mean one-year route revenue enhancement and insurance is in Malaysia is besides among the lowest in the part, with annual route revenue enhancement at RM398 and insurance at RM 3.062. In Singapore, it is RM2, 756 and RM7, 960 severally, while Indonesians pay RM1, 837/RM4, 593, Thais RM459/RM6, 736 and Filipinos RM306 and RM2, 847. MITI even gave some existent illustrations. Apparently, ownership costs for a Honda City in Malaysia, accounting for gasoline subsidy, is RM126,491, which is lower than Thailand ‘s RM147,875 and Indonesia ‘s RM159,963. Ownership costs for a Toyota Vios besides follows the tendency – RM125, 361 in Malaysia, RM146, 475 in Thailand and RM147, 283 in Indonesia ( Tan, 2012 ) . When comparing the car monetary values of Malaysia within others ASEAN states such as Singapore, Malaysia has the lowest monetary value due to all these factors which contribute more to low cost of vehicle ownership. When compared against Thailand and Indonesia, the CVO in Malaysia is lower by 39 % and 12 % severally. When comparing the Vehicles one-year insurance premium in three ASEAN developed states viz. Malaysia, Philippines and Vietnam are by and large among the lowest holding the insurance premium, while one-year premium in Thailand, Singapore and Indonesia are much higher comparative comparisons to Malaysia in the order of 210 % , 175 % and 126 % higher severally ( Sahari, 2012 ) . Malaysia is amongst the highest auto ownership in the universe which is about 600 autos per 1,000 populations since 2003 passing ( Zakariah, 2012 ) .

3.2 Automobile Market Analysis On car purchase loan

When a consumer wants to buy a auto, involvement rate on bank is the most of import thing that will find of purchasing a auto with loans. Largely, Bankss or Sellerss will bear down a high involvement rate when buying a national auto compares to foreign autos this is because the Bankss want purchaser to reassign the loan to a trusted party and forestall us to hold a debt or allow us presume payments before doing a purchase loan on certain auto. Harmonizing to mybestdealer.com in first September 2012 auto loan involvement rates on national auto such as proton auto is 2.60 % to 2.90 % while perodua 2.78 % to 2.90 % , Honda 2.38 % to 2.60 % and Toyota 2.40 % to 2.60 % . Buying loan on auto is chiefly depending how many old ages we can do a payments with the involvement rate charges given. Higher involvement rates will do auto purchasers to pay a higher monthly payments for the same autos which been sold. Nightlong policy rates ( OPR ) is an nightlong involvement rate set by BNM to pecuniary policy way to foretell the motion of short-run of involvement rates. Not excessively long ago, when the OPR was at a historical depression of 2 % , users used to pay merely up to 2.8 % involvement rate for a new non-national auto.

3.3 Automobile Market Analysis on CPI addition, fuel subsidies and authorities position.

A consumer index monetary value defines as a step that examines the leaden norm of monetary values of a basket of consumer goods and services, such as transit. The CPI is calculated by taking monetary value alterations for each point in the preset basket of goods and averaging them ; the goods are leaden harmonizing to their importance. Changes in CPI are used to measure monetary value alterations associated with the cost of life. Sometimes CPI referred to as “ headline rising prices ” . CPI in Malaysia has increase chiefly cause by the lifting crude oil monetary values crisis. This because of the demand on fuel resources in automotive use has increase by the clip. Cost of ownership vehicle in Malaysia is really low among state plus with the subsidies given by the authorities cause the fuel monetary values much lower than other states and demand for it become larger and has giving impact toward the CPI in Malaysia. Monthly indexs up to August 2012 indicate that Malaysia ‘s industrial production could see more contraction in the months in front. Inflationary force per unit areas remain moderate ; in August, CPI information showed Malaysia ‘s headline rising prices growing rate staying stable at +1.4 per cent yoy, unchanged from the old month. That ‘s about half the twelvemonth ‘s high of 2.7 per cent, which was achieved in January 2012. ( Suzy, 2012 ) .

Fuel subsidies largely refer to authorities enterprise to pay for the difference of the monetary value of fuel at the pumps station and existent cost of bring forthing the merchandise. So by these method enables that the monetary value of fuel which has been subsidies by authorities will do the fuel monetary value will much lower comparison fuel monetary values in other ASEAN states and it besides often will lesser consumer load on use of fuel particularly for those who are derive lower income. A fuel merchandise is monetary value elastic when the alterations in fuel monetary value cause the demand of fuel will progressively. For illustration, an addition in fuel monetary value will cut down the consumer demand for a auto ( Zakariah, 2012 ) . The snap of demand toward the fuel ingestion gives impact toward the CPI in Malaysia. When the alterations in fuel monetary values are lower, the demand for fuel will increase so the consumer monetary value index will demo an progressively motion in CPI informations. Malayan authorities largely inject to types fuel subsidy in automotive auto or fuel provider such as direct and indirect fuel subsidies. By and large, most consumer know that direct fuel subsidies is direct fiscal transportation which means authorities will give some fiscal resources that so will take down the concluding merchandise of fuel. Government ca n’t to the full give subsidies to supplier because later we will the impact towards the diminishing returns because uncertainnesss in allocate of the resources and deficient wastage of the merchandise.

For a long clip, we know that authorities largely concerns on automotive industry in Malaysia because automotive industry has contribute more to our economic system GDP and authorities has take an action to protect our automotive industry by making protectionist policies upon national auto and attempt to increase the revenue enhancement import on foreign vehicle. To promote more investings from other states, authorities has implement revenue enhancement inducements for automotive industry and the makers. Each of national budget, Malaysia authorities has inject and gives more inducements in automotive industry for farther development so that it can bring forth income to domestic GDP.

3.4 Automobile market analysis on market demand chance.

Malaysia car market analysis on market demand prospect expression into client ‘s buying power of national auto. Most of Malayan consumer vehicle normally use this national auto due to its ain cost of vehicle ownership low. This Malayan automotive market demand prospect look into possible client or their inclination to purchasing and willingness to buy vehicle. Market demand on national auto will be higher due to demand for national auto addition. Most clients have concerns about doing purchases and seek to compare merchandise on offer from assorted. Harmonizing to study of 2011 MAA has predicted that vehicles sold would make an sum of 618 000 units of national auto. Unfortunately in July, MAA has adjusted this figure diminution to 608 000 units and this merely was made before inundations crisis which was happen in Thailand which impacting loss of vehicle production and gross revenues in automotive industry.

Yet, progressively demand on vehicle cause by the impact of revenue enhancement discount and consumer interact market liberalize could better the negative influences on the demand of new autos. When the demand of autos addition, the automotive industry besides will lend in footings of Malaysia growing domestic merchandise ( GDP ) due to the volume of trade that takes topographic point. Since automotive industry is really competitory to other foreign autos, this automotive industry plays an of import function to a state economic system. When economic system slows down, consumer disbursement on demand of vehicle will diminish and this impacting automotive industry confronting worsening gross revenues, uncertainnesss gross addition, loss of net income and lifting stock lists in automotive industry. In 2011, fiscal defect, lifting fuel monetary values and hapless gross revenues public presentation has contributed to hapless development in automotive industry.