Raising prices of fuel is never popular and in some countries where governments have done so suddenly, there has been public anger and even riots. In Malaysia, while RON97 petrol has not been subsidized for a while and has fluctuated according to global oil prices and the calculations of the Automatic Pricing Mechanism (APM), RON95 petrol and diesel have had their prices maintained through subsidies.
Come 2020, there will be a major change as the subsidies stop being available to everyone and the new Petrol Subsidy Program (PSP) is implemented. The PSP (only for Peninsular Malaysia) will be for some 2.9 million qualified motorists who will receive their subsidies at 4-month intervals from April 2020. The cost of the subsidies will be around RM65.4 million a month.
With subsidies removed, fuel prices will go up and this can be disruptive for motorists. So what the government plans to do is to increase the price per litre gradually. Currently, the plan is to add 1 sen each week and slowly bring pump prices to the level indicated by the APM.
The plan was revealed by the Deputy Domestic Trade and Consumer Affairs Minister, Chong Chieng Jen, who said it would reduce the burden on the public and prevent prices from spiking once subsidies are removed. The price of RON95 petrol will remain as RM2.08 a litre for Sarawak, Sabah and Labuan.
The Malaysian Institute of Road Safety Research (MIROS) and Lazada Malaysia today signed a Memorandum of Understanding (MoU) to work together to raise awareness on the importance of child restraint systems (CRS) in reducing road fatalities. As part of the initiatives under the MoU, Lazada Malaysia has launched its Car Seat Assurance programme – a curation of CRS products on LazMall – which currently offers over 40 product models from 6 local and international brands.
Prices range from RM100 to RM1,599 and Lazada gives assurance that each childseat bearing the Car Seat Assurance icon are sold by companies which have submitted to Lazada copies of UNR44 or UNR129 certificates (which are strict and comprehensive sets of child carseat safety regulations by the UN) as well as crash test reports. This product documentation has also been submitted to MIROS for further evaluation as part of an ongoing process to ensure that product safety is not compromised.
Compulsory use of child restraint systems, ie childseats, will come into effect from January 1, 2020. All childseats must meet the United Nations’ ECE R44/04 and ECE R129 specifications.
The Lazada Car Seat Assurance icon on the lower right corner is for products which are confirmed to meet the regulations that are based on UN standards. MIROS also reviews the documentation to ensure that product safety is not compromised.
“We are delighted to have Lazada on board to carry out this initiative which will contribute to the government’s objectives to reduce serious road traffic injuries and fatalities. Through the Lazada Car Seat Assurance programme, we hope to educate more parents on the importance of CRS use and choosing the appropriate CRS for their children which meets the requirements detailed in the Guidelines for Child Restraint System in Malaysia,” said Dr. Siti Zaharah Ishak, Director-General of MIROS.
“We also need to change the perception that regulation-compliant childseats are unaffordable and make it easier for Malaysians to purchase childseats from wherever they may be and accessible throughout Malaysia,” Dr. Siti added.
Visit www.miros.gov.my to download a free copy of the MIROS guidelines on childseats.
During the first 6 months of 2020 when the law is in effect, summonses will not be issued to motorists who do not place their small children in childseats. Enforcement officers will give warnings and advice instead. The firm decision to introduce the law comes from the fact that less than 30% of motorists have been found to provide childseats, while a MIROS study found that 31 out of 53 (58 per cent) children and infants died due to road accidents.
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New vehicle sales for October – the first month of the final quarter of 2019 – began on a high note with a 21% increase over the Total Industry Volume (TIV) in September to 53,870 units. This volume was also 14% higher than for the same month in 2018 although a comparison may not be right since it was after the GST-free period when sales had seen a huge boost and the market slowed down in the first few months after that.
The Malaysian Automotive Association (MAA) attributed the increased TIV to more selling days as well as more working days. When there are many holidays, there is also disruption in processes such as registration and loan approvals, delaying completion and affecting deliveries.
Source: Monthly reports of Malaysian Automotive Association
By segment, passenger vehicles (excluding pick-up trucks for personal use) accounted for 93% of the TIV in October, a 16% increase over the same month in 2018. However, commercial vehicle sales were virtually unchanged with 4,883 units (including pick-up trucks) delivered.
The cumulative TIV after 10 months of this year reached 496,861 units which was 5,267 units lower than for the same period in 2018. The higher TIV last year was due to the 3-month GST-free period which saw an above-average surge in monthly sales as buyers could enjoy significant savings (especially for the more expensive models).
Production
The assembly plants collectively produced 55,775 vehicles in October, compared to 51,789 vehicles in the same month in 2018. The increase was largely in the passenger vehicle segment while the commercial vehicle segment declined.
Cumulative production for 10 months was 481,816 units which was 97% of the cumulative sales volume but this direct comparison may not be entirely accurate as there would be an overlap in stocks and imports. Popular models may leave the plants within days of being completed but there may also be vehicles which don’t move out so fast (although the plants would not want them around too long either as they take up parking space).
With two months left to the year and a forecast of 600,000 units for the year by the MAA, it means that sales in November and December must average 51,569 units. This year, 5 months have seen the TIV above 50,000 units and it’s often the case that there is such a big boost in December that the forecast is met.
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The latest JD Power Initial Quality Study (IQS) for Malaysia which provides insights into the problems faced by owners of new vehicles shows that they are experiencing fewer problems than in 2018. This is largely attributed to a decline in manufacturing-related issues and prevailing problems are nearly equally split between design and manufacturing categories.
Initial quality measures the number of problems experienced per 100 vehicles (PP100) during the first two to six months of ownership, with a lower count reflecting higher quality. In this year’s study, the industry average decreased to 85 PP100, from 89 PP100 in 2018.
The study showed that the share of manufacturing-related issues has been on the decline over the past 3 years, falling to 51% in 2019 from 74% in 2016. The majority of the reduction from last year related to noise aspects, such as wind noise (-1.7 PP100); abnormal suspension noise (-1.1 PP100); seat noise (-0.9 PP100); abnormal transmission noise (-0.7 PP100); and other interior storage compartments noises (-0.3 PP100).
One-third of issues relate to noise
That said, noise-related issues accounted for 36% of all manufacturing issues identified by owners this year. On average, the overall rating on quality and reliability of new vehicle is lower among owners who reported such noise-related manufacturing issues than those who did not (7.3 and 8.2 respectively on a 10-point scale). Interestingly, engineers are some car companies have told PISTON.MY that Malaysians seem to have the ‘most sensitive’ ears as complaints about noise tend to be higher than from motorists in other countries!
“Vehicle owners continue to be sensitive to noise-related problems, which strongly affect their overall perception of the vehicle’s quality,” said E-Ling Cheah, Country Manager for Malaysia at J.D. Power. “Given the heightened customer sensitivity around buzz, squeak, rattle and wind noises, manufacturers need to not only improve their manufacturing processes but also work upstream to review and redefine vehicle design guidelines to avoid such issues surfacing early in the ownership cycle.”
Some key findings of the 2019 study
Among the top 5 problems, 4 were similar to the top 5 in 2018. Excessive wind noise (5.9 PP100) and excessive road noise (2.9 PP100) continued to be the top two most-cited problems. “Built-in Bluetooth Mobile Phone/Device Has Frequent Pairing/Connectivity Issues” became the third most reported problem (2.7 PP100), up from fifth last year (2.5 PP100). Radio problems were fourth this year (2.0 PP100).
Younger car owners cited more problems when responding. Those under 35 years old (57%) indicated more problems than those 35 years or older (91 PP100 vs. 73 PP100, respectively). Younger car owners cited more problems in the features/controls/displays (+4.6 PP100) as well as vehicle interior (+4.5 PP100) categories. Perhaps they have more sensitive hearing?
Among new vehicle owners who did not indicate any problems, 49% said they “definitely will” recommend their brand and model to friends or relatives, compared with 37% for those who had encountered at least one problem with their vehicle. One-third of new vehicle owners who did not experience any problems with their vehicle said they “definitely will” purchase a vehicle from the same brand the next time, compared with 26% of those who experienced at least one problem.
The J.D. Power 2019 Malaysia Initial Quality Study was based on responses from 1,904 new vehicle owners who purchased their vehicles between July 2018 and August 2019. The study, conducted between March and October 2019, included 50 passenger car, pick-up and utility vehicle models of 12 brands.
No more studies in ASEAN after 2019
JD Power has been conducting a series of three studies annually for the past 17 years but will no longer do so after this year. Reorganization sees the regional office in Singapore, which was responsible for the Malaysian market, shutting down. The company, founded in 1968, will focus on business activities in China and Japan from 2020 onwards.
Almost all (97%) of residents in Malaysia who participated in a survey think that owning a car is important and 67% still see the car as the ideal mode of transport. However, more than half (51%) said that they would consider giving up car ownership and rely on long-term car rental if it was convenient and easy for them.
This is the finding of ‘The Road Ahead: The Future of Mobility’, a new report by Avis Budget Group which examines the way in which the mobility landscape is changing around the world, how it is likely to look in the future and, how people in different countries view these changes.
In the research conducted across 16 countries in Europe and Asia, including Malaysia, respondents revealed that over the next decade, consumers are likely to move to an access-driven and on-demand model as their favourite mode of transportation.
Technology drives transport revolution
The single biggest factor leading the transport revolution is technology, specifically 5G networks. Most recently, the Malaysia government has started a nationwide demonstration of 5G projects that indicated it was on track to becoming one of the first Asian countries to launch the technology. Once implemented, the large amounts of data provided by the 5G networks will enable mobility companies to collect and mine data for insight, which can be used to improve travel experiences.
To this point, the Avis Budget Group’s research revealed that 73% of respondents feel comfortable having their data accessed and shared for the implementation of smart infrastructure and better travel experience. More than 4-in-5 (81%) of respondents also expect driving to become easier in the coming years.
“Driven by technology advancements and the influence of services like Amazon, Netflix and Spotify, people today want to consume and access products and services at the click of a button. The expectation for an on-demand service has impacted the mobility industry and resulted in the evolution we’re seeing today – from being able to book a taxi instantly to hiring a car for a week-long holiday – all from your smartphone. However, our report reveals that we are now seeing a rise in this demand for instant access and flexibility, resulting in changing behaviours towards car ownership,” said Keith Rankin, President, International, Avis Budget Group.
“Changing needs and the expansion of the sharing economy offer both challenges and opportunities for the mobility industry. Our research has shown that whilst consumers are expectant of connected, integrated and on-demand services, they still want convenience at a reasonable price.
“It’s imperative that different mobility players work together to ensure the future needs of consumers are met. We have demonstrated the success of collaboration, as shown with our fleet management as a service (FMaaS) partnerships with Via and Lyft, and our agreements with Ford and Continental in providing connected cars,” he added. “Our partnerships demonstrate well how the sector can work together to provide the on-demand and connected services that customers want. These can range from a technology giant delivering 5G, or local governments working with the private sector for improved, urban electric vehicle access for residents.”
