Softer demand for new cars after Hari Raya, as Middle East conflict has reduced buying confidence – Pekema

The ongoing tension in the Middle East is expected to weigh on Malaysia’s automotive industry, with demand for new vehicles showing a slight dip since the conflict began, said the Malaysian Malay Vehicle Importers and Traders Association (Pekema).

Its president Datuk Mohamed Nazari Noordin said the softer demand trend was first observed after the Hari Raya Aidilfitri period, very much influenced by global geopolitical uncertainty. “There has been a slight drop in demand for new cars, especially after Hari Raya, and the conflict has also affected buyer confidence,” he said earlier this week.

“Most people are taking a wait-and-see approach and are being cautious in making purchases,” he said, adding that consumers are likely now prioritising essential spending over big-ticket commitments such as vehicle or property purchases.

He said vehicle prices remain stable for now where Pekema was concerned, as most of the imported reconditioned vehicles handled by it were being brought in from Japan, with currency exchange rates still relatively favourable against the ringgit. However, he added that if the Middle East conflict continued, shipping costs could rise and eventually place upward pressure on vehicle prices.

He said the main challenge currently facing the industry right now lies in logistics and supply chain disruptions, including congestion at local ports, the Malay Mail indicated, citing a Harian Metro report. “Recently, about 1,500 vehicles had to be unloaded at ports in the Philippines because they could not be processed at Port Klang due to congestion,” he said.

Given the current developments, he said Pekema does not expect a sharp decline in sales, but anticipates a flat performance compared to last year, with a slight dip likely if global conditions remain unstable. “Sales performance for Dongfeng electric vehicles last year was encouraging, with about 300 units sold, but current trends show a wait-and-see approach among buyers,” he said.

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