Bleak outlook for automobile sector in 2018

|     James Kon     |

BRUNEI’S automobile industry has seen a major drop in car sales since 2014.

According to an industry insider, the outlook for the automobile sector in 2018 looks bleak as the downward trend in sales continues.

Statistics provided by Brunei Automobile Traders Association show that total car sales in 2014 were 18,132, which plummeted to 14,406 in 2015, a drop of 3,726 units.

In 2016, the number of cars sold further decreased to 12,730. The downward trend continued last year which saw sales decline by 1,518 units to 11,212.

The statistics were revealed by Frankie Ho, Managing Director of Grand Motors Sdn Bhd in a recent interview.

According to Frankie, the main reason for the continued drop in sales is that banks and financial institutions in the country are no longer lending money to people for car purchase. “Getting finance to buy a car is currently quite difficult,” he said.

“In the last three years, we have seen customers downgrading their choice of vehicles to A and B segments. We have seen big increase in sales in these two segments in the past years,” he added.

The A and B segments comprise smaller vehicles with 1,000cc-1,500cc engine displacement.

Frankie, who has been active in the automobile industry for more than 33 years, also pointed out that the C Segment has also been adversely affected.

The segment includes mid-range cars with engine displacement between 1,600cc and 2,000cc.

According to Frankie, sales of niche models from luxury brands have been quite stable.

“Another factor that indirectly affects the automobile industry is the general economic slowdown. If the situation persists, it is going to be a difficult and highly competitive year.

“I believe there will be another drop in 2018 following the trend in the past years. If the trend continues, the industry may be forced to downsize in order to remain afloat,” he said, adding that “we need to adjust ourselves”.

Despite this, the automotive industry in Brunei will remain important in the years to come, he noted. “Cars still remain as the most preferred means of transportation for people in the country.”

He urged financial institutions in the country to be more flexible in providing car loans to the public.