Of car sales, unemployment and property market; related definitely

Car sales, those of the more expensive ones were up last year. Malaysia: Negative sentiment, positive luxury car sales General conclusion? Perhaps the richer ones were still rich and many of them decided to change cars last year. Or perhaps many of their children got new cars last year. 🙂  My Exora is already in its 3rd year, so it was not included in the list and definitely not under the luxury category. Based on an article in TheStar. Well, number for March 2016 is HIGH. Much higher than February 2017. Reasons? More days plus many companies were rushing the deliveries as their financial year was ending on March 31 2017. (Tax purpose lah…)  Total units rose 26.5 percent to nearly 54,000 units in march 2016 and the Malaysian Automotive Association (MAA) said on Tuesday that the April numbers should match March’s. It said one key reason for this good numbers would be the promotional campaigns by the car companies. (Generally, I do agree but we should note that if the sales numbers are good in the first place, promotions need not be so aggressive.)

This brings us to my personal reasons why car sales are still up. Well, many Malaysians continue to have a job (means low unemployment rate) and many remain upbeat about their career prospects. Let’s be real, if we fear the loss of our job within the next few months or next year, would we be buying a car this year? More likely for us to get a cheaper second-hand car, right? For those who want to say but I can get a (Energy Efficient Vehicle) EEV car. Allow me to smile at you. Next go to those car listing sites and take a look at what’s available for half the price of that EEV car that you are talking about. Whatever fuel you can save is NOT likely to save you RM20,000 within 9 years. Not a joke. Don’t believe me? Assuming the usual cost per km is 25 cents. (latest fuel price and car is a Persona 1.6; old car lah). Assuming your awesome EEV cost per km is ONLY 10 cents per km. That’s 15 cents per km difference. Every year, you drive 20,000km, that’s a savings of RM3,000. After 9 years and hitting close to 200,000km (which majority would never hit anyway), you got to save RM27,000.  WOW…. However if the reason to buy a new car is because you want to show off (you have a promotion or still have a job) or you just love the new car smell, then your reasons are all  valid. Please go get a new car. Stop telling people about the fuel saving reason.

What about the property market then? Well, remember all those stories circulating around saying home loan rejections are high? Well, if we earn X amount and we bought a new car which needs an instalment of over RM1,000 then the banks would definitely wonder if we could really afford a property, since we are already paying for a new car which will take another 9 years. Especially when that home loan would border on our Debt Service Ratio. When banks feel unsafe, they would not take the risks lah. No banks love the potential for non-performing loans. (NPL). Of course, I would also hope that all those buying cars are those that got a good promotion and a big increment, then the home loan approval would have no issues. Happy buying things that we love. Live life without regrets. If we intend to regret, then it’s best not to buy or get a cheaper car instead.

written on 18 April 2017

Next suggested article: Buying a new car may just be a better choice than property

 

 

, says the MAA.

MAA added the March vehicle sales were also higher than a year ago, registering a 10% growth of 4,929 units than a year ago.

The March 2017 sales of 53,717 units comprises of 48,355 cars and the rest were commercial vehicles.

Year-to-date, total industry vehicle sales rose  7.3% to 140,839 units comprising 127,530 passenger vehicles and 13,309 commercial vehicles from the 131,251 units in the previous corresponding period.

The MAA data also showed that production rose to 49,356 vehicles in March this year, an increase of 3.2% from 47,810 units a year ago. Passenger vehicles totalled 45,124 units and commercial vehicles at 4,232.
Read more at http://www.thestar.com.my/business/business-news/2017/04/18/march-vehicle-sales-vroom-past-february-volume/#T1MPe2fxS1OAXDWM.99

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