KUALA LUMPUR (Jan 9): Frost & Sullivan expects vehicle sales in Malaysia to reach 601,000 units in 2018, up 2% from its 2017 overall target of 589,209 units, as consumer confidence improves in tandem with Malaysia's economic growth.

Frost & Sullivan senior vice president of mobility Vivek Vaidya said the strengthening ringgit is likely to reduce the import costs of automotive parts and completely built-up models, leading to a price stabilisation this year.

"The launch of the all-new Perodua Myvi in [the second half of 2017] and other key models including the new Toyota CH-R [this year] will also drive sales in 2018," he told a media briefing on the consultation company's auto outlook for 2018 today.

However, Frost & Sullivan noted that Bank Negara Malaysia's continuous efforts in improving the quality of loans may make it difficult for low-income families, young buyers, as well as small and medium enterprises to secure loans, thus affecting this year's total industry volume.

"Other factors such as the National Automotive Policy, improvement in public transport infrastructure and the growth of ride-sharing services will impact the auto market in Malaysia," Vivek said.

He said while these factors will have a long-term effect on the market, they are unlikely to have any significant impact in 2018.

"While persistent high household debt will continue to encourage cautious spending, expected wage growth is likely to provide the requisite counterweight," added Vivek.