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Wednesday, August 20, 2008

Luxury vehicle players bullish on demand

Six companies to launch seven new models this week

PETALING JAYA: High-end motor vehicle players are confident that high oil prices and rising inflation will not dampen demand for their cars.

As proof of their bullishness, seven new premium car models from six companies are being introduced this week starting with a facelift version of the Volvo S40 today.
The others are BMW X6, Mitsubishi Lancer Evolution, Citroen Grand C4 Picasso and Citroen C6, new Honda Jazz, and a variant of the Lexus LS460.

Prices for these new models range from about RM105,000 (Jazz) to close to RM800,000 for the Lexus.


BMW Malaysia Sdn Bhd managing director Geoffrey Briscoe said the premium car segment continued to show positive growth despite recent concerns over the economy.



Affin Investment Bank auto analyst Jason Yap believes that under the current economic conditions, the biggest losers are car companies catering for the middle range segment.

“We don’t see the high oil and food prices having any material impact on the high-end segment as they are financially stable,” he told StarBiz via e-mail.

“We see the middle range segment increasingly moving to the lower end segment.”
He, however, maintained a cautious outlook for the high-end segment, and forecast a “neutral” outlook for the companies launching new models this week.

“Other imported cars should see a slight decline, probably also affected by the sluggish second-hand car market value,” he added.


Another analyst said as high-end vehicles were targeted at affluent customers, the high oil and food prices would have minimal or no impact.
AmResearch Sdn Bhd executive director Azharuddin Nordin meanwhile forecasts a stable outlook for high-end cars.

“I don’t think it (the high-end segment) would be affected by inflationary pressures,” he said, adding that should the economy slow down severely, sales may be impacted.

Rising hire purchase rates - now ranging from 3.7% to 3.8% - likewise have made no dent on demand in the market segment.
As for the auto players, BMW Malaysia Sdn Bhd managing director Geoffrey Briscoe said the premium car segment continued to show positive growth despite recent concerns over the economy.

“The first six months of the year showed growth and we are confident we will end the year on a high note,” he said via e-mail.

“The era of ‘cheap oil’ is over and people will start to come to terms with this.

“BMW vehicles are among the most efficient within their segments. If there is a new sense of energy awareness, we only stand to gain,” he said.

Briscoe said introducing a new model now was part of the group’s priority to provide its customers with the latest available models.

Volvo Car Malaysia Sdn Bhd president Robert Norrman concurred that the premium car segment would be relatively unaffected in light of current economic conditions, adding that its new Volvo S40 would be replacing a model that was launched in 2004.

“It’s time to give car buyers a fresh design, a new look and also to showcase how far Volvo has come from the older designs.”

Norrman said the car was targeted at the young, intelligent and savvy market that was able to afford a premium European car.

“There are many who want to upgrade from Japanese or Asian brands to a premium car that gives better performance with unique Scandinavian/European design,” he said.

Honda Malaysia Sdn Bhd managing director and chief executive officer Atsushi Fujimoto said: “Because of high fuel prices, people are going for fuel efficient cars.

“We believe the timing to launch a new (fuel efficient) model is perfect and will perfectly suit the needs of customers.”

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