Around 80% of owners of Proton and Perodua vehicles take loans of up to nine years on their vehicles, and some extend the loan period even further if permitted to do so, according to AmInvestment Bank cited by New Straits Times.
In its investment note, AmInvestment Bank wrote that the cars from the two national carmakers are the top choice among the low- to moderate-income demographics, and the cars are considered a consumer necessity rather than a luxury for these income demographics.
“Their priority is the monthly repayment instalments. Their financial balance is influenced by the prevailing interest rates. The everyday people closely monitor the overnight policy rate (OPR) as their financial situation aligns with it. This is a factor that the government cannot overlook,” AmInvestment Bank was cited as saying in its note, adding that Bank Negara Malaysia has maintained the OPR at 3.0% since last May.
Vehicle loan applications and approvals are maintaining a strong rate, particular for the Perodua Myvi, which continues to see very high demand. This is driven by buyers rushing to purchase their vehicles due to concerns for potential increases in the OPR, which would increase vehicle ownership costs, reported New Straits Times.
Meanwhile for used vehicles, demand continues to be high and show no signs of being affected, according to AmInvestment Bank, as supply chain issues last year resulted in lower production, and demand for vehicles was pushed to the used car segment.
“Sales are strong, but mostly for the affordable car segment, especially for those made in Japan and domestically. The current trend also shows buyers avoiding purchases of cars with large-capacity engines, [which] may be due to concerns about fuel subsidy rationalisation,” the report continued.
On a separate view, AmInvestment Bank observed at showrooms that there is strong interest shown in battery electric vehicles (BEVs), where potential buyers are comparing fuel savings against electricity costs. The bank noted that BEVs “are currently the focus of car enthusiasts, especially among the T10 income group who view such vehicles as ‘toys’, suitable for weekend use,” the report wrote.
“Of all the EVs purchased, customers opt for loan periods of five years, and some even pay cash, which is a common practice among the elite T12 group. Furthermore, various tax exemptions such as [for] excise duties, sales tax and road tax make BEVs a worthwhile investment for the elite,” AmInvestment Bank was quoted as saying.
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