New motor vehicle sales in Malaysia rose 26 percent in the first six months compared with a year ago, but may slow due to higher fuel prices, soaring inflation and rising interest rates, an industry group said Wednesday.
The Malaysian Automotive Association, however, maintained its target for full-year sales growth at 4.7 percent to 510,000 vehicles.
Sales in Southeast Asia's biggest passenger car market rose to 277,974 units in the Jan-June period, largely due to improved sales by national carmaker Proton, said association president Aishah Ahmad.
But demand for passenger cars is expected to fall to 232,026 units in the second half this year, she said.
"We expect the second half of the year to be a bit more bearish but because of the strong growth in the first half, we expect to maintain our full year sales at 510,000 units," Aishah told a news conference.
She warned that the association will cut its full year forecast if the central bank raise interest rates later in the year to curb rising inflation _ a move which would hurt vehicle sales.
Proton's sales surged 55 percent during the first six months to 72,957 units, giving it a 26 percent market share. It trailed behind domestic rival Perodua, which sold 83,589 units to claim a 30 percent market share. Japanese carmaker Toyota ranked third with a 19 percent share.
Aishah said demand remains robust for small fuel-efficient cars as well as luxury vehicles.
But a sharp 43 percent hike in retail gasoline prices in June, rising material costs, higher interest rates, a stock market slump and inflation _ which hit a 27-year high of 7.7 percent in June _ will affect sales going forward, she said.
The central bank last week put off raising interest rates to tame inflation, but economists have predicted rate hikes later this year.
Malaysia is the third largest vehicle market in Southeast Asia after Thailand and Indonesia, but it remains the biggest passenger car market in the region, the association said.
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