The Malaysian government should consider cash incentives for car owners to voluntarily scrap old vehicles as part of efforts to revive the slumping auto market, an industry group said Monday.
Sales of new vehicles in Malaysia, Southeast Asia’s largest passenger car market, fell for a 14th straight month in March to 38,619 units, down by nearly 17 percent from a year earlier.
Last year, new auto sales in the country dropped 11 percent to 490,768 units largely because of tougher loan conditions, weak resale value and higher interest rates.
That trend is accelerating as vehicle sales in the first quarter sank 15 percent to 104,950 units.
Aishah Ahmad, president of the Malaysian Automotive Association, said the government should consider giving cash incentives to encourage owners to voluntarily scrap old cars and ensure less stringent financing terms to boost sales.
New vehicle sales in Malaysia are spurred largely by owners upgrading their cars, but the weak resale value of used cars has hurt demand for new ones, she said.
“If there is cash incentive, owners have an option to scrap their car and get a better used car,” Aishah told The Associated Press.
”If sales of used cars improve, then new car sales will also be better.” – AP