KUALA LUMPUR, Malaysia (AP) -- New auto sales in Malaysia rose a better-than-expected 12.5 percent in 2008 but are seen sinking this year amid the global economic slump, an industry group said Wednesday.
Sales in Southeast Asia's largest passenger car market surged to 548,115 units last year, the second-highest achieved in the industry after the record set in 2005, said the Malaysian Automotive Association.
The 2008 figure beat the group's forecast of 510,000 units, buoyed by a strong economy, the launch of cheaper cars, aggressive sales campaigns, low interest rates, longer repayment period and higher margin of financing, said its president Aishah Ahmad.
But the global economic slowdown will hurt auto sales in 2009, which is expected to tumble 12.4 percent to 480,000 units, Aishah said.
"People are holding back in their purchases. Consumer confidence is not there," she told reporters.
Smaller engine-capacity cars are expected to benefit amid the slowdown as consumers downgrade to cheaper and more fuel-efficient vehicles, she said.
The association, which groups some 40 car manufacturers and distributors, projected sales to recover to 490,000 units in 2010, and to rise to 556,500 units by 2013.
Compact car maker Perodua was the best-selling car brand in 2008, retaining its leadership for a third straight year. But its market share dipped to 30.5 percent from 33 percent in 2007, the association said.
National carmaker Proton gained ground with a 26 percent share, up from 24 percent in 2007. Japanese carmaker Toyota Motor Corp. secured 18.5 percent of the market, followed by Honda Motor Co., with 5.9 percent, and Nissan Motor Co., with 5.6 percent.
Aishah said auto companies are now grappling with higher cost as a stronger Malaysian ringgit made it more expensive for them to import raw materials, while transportation and shipping charges have also increased.
She said prices of commercial vehicles such as trucks have been raised recently to offset the higher cost, and warned that prices of passenger cars may follow suit.
"The ringgit has appreciated against the yen and other currencies. Our members are losing out in exchange rates. As we go along, we cannot help but to relook at prices," she said.
Despite the tough operating environment, Aishah said there were no plans by any of the association members to downsize. There are still carried over orders from the strong sales last year, while the introduction of new models will help to sustain buying interest, she added.
Due to the economic slowdown, Aishah said the association has also postponed the Kuala Lumpur International Motor Show, a triennial event due in late May. A new date will be set later, she said.