[PRINT] Diesel car registrations hold steady amid subsidy rationalisation

 

By SHYAFIQ DZULKIFLI

PETALING JAYA: The price of diesel may have gone up, but demand for cars powered by the fuel has yet to drop. 

Diesel car registrations grew by 7.8% last month despite the diesel subsidy rationalisation in June which led to an increase in pump prices. 

According to the government’s data.gov.my website, 4,726 diesel cars were registered with the Road Transport Department (JPJ) in July compared to 4,383 the previous month. 

Carsome group chief business officer Aaron Kee said the increase in diesel car registrations in July could be attributed to a rebound effect for the overall automotive industry following a significant decline in June. 

“According to data from the Malaysian Automotive Association (MAA), the Total Industry Volume (TIV) in June 2024 was 17% lower than in May 2024. 

“From the low base rate in June 2024, the market recovered in July 2024, with 26% higher new vehicle sales compared to June 2024. 

“This increase is merely a recovery after the substantial drop in June,” he said.

The January to July period saw 487,851 car registrations, of which 31,931 (6.5%) were diesel cars.

Petrol cars dominated with 90.9% of the total while electric vehicles recorded 2.6%. 

In 2022, diesel cars accounted for 8.6% of the market share, but this dropped to 6.5% this year.  

Electric car registrations have however surged from 0.4% in 2022 to 2.6% this year. 

In terms of cumulative registrations from January to July this year, the Toyota Hilux secured the top spot with 13,778 registrations. 

In second place is the Mitsubishi Triton (4,483), Isuzu D-Max (3,986), Ford Ranger (2,826) and Toyota Fortuner (2,006).

Kee said that although the diesel car registrations went up last month, the growth is considered marginal when compared to the overall market growth. 

"The overall market grew by 26% in July, while the commercial vehicle segment, including diesel vehicles, only saw a growth of 2%. 

“This showed that commercial or diesel vehicles underperformed in the market after the diesel subsidy rationalisation," he said. 

Kee added that the underperformance in the sale of diesel vehicles may be due to the market adjusting to higher diesel prices and complications in the diesel fleet card roll-out, which the government is actively trying to resolve. 

In June, Carsome's industry outlook projected that the diesel rationalisation exercise would have minimal long-term impact on the sale of diesel vehicles. 

“We anticipate an approximate 15% drop in commercial vehicle registrations this year compared to 2023, which is in line with the Malaysian Automotive Association’s forecast. 

“However, given the commercial sector’s reliance on diesel vehicles, we expect the market to gradually normalise as businesses adapt, aligning with our earlier projection of a short-term impact on diesel vehicle sales, followed by a gradual recovery," he added. 

Furthermore, Kee said that people are also making measured decisions in anticipation of the speculated petrol subsidy rationalisations. 

“However, we believe that the implementation may not take place so soon as any such changes must be clearly communicated early on to ensure the public has sufficient time to adjust,” Kee said.

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