Malaysia's automotive loan guidelines pulls down car sales

New guidelines for automotive loan borrowers will be discussed following the 25 % drop in sales of new motor vehicles last month, says Proton.

The guidelines have been in force since Jan 1.

The Proton Edar Dealers Association Malaysia  has called on Bank Negara Malaysia for the new responsible financing guidelines to be looked into, as it has severely damaged sales with only 30 per cent of applicants securing car loans in the first two months of the year.

The Malaysia Motor Association reported a 25 per cent drop in sales of new motor vehicles, due to a tightening of the hire purchase loan approval process, a short working month and impact of Thailand's flood disaster.

Proton Holdings Bhd Group Managing Director, Datuk Seri Syed Zainal Abidin Syed Mohamed Tahir, said that the matter had to be taken seriously as the entire industry eco-system would be severely affected in the long-term if not resolved soon.

"The automotive industry is very much linked to the country's economic growth. We understand the move is in line with the government and Bank Negara's intention to control household debt and we agree to it. But if this continues, it's not good for everybody, with less cars, less income and less taxes, due to the ripple effect," he added.
     
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