KUALA LUMPUR:  Frost & Sullivan expects Malaysia's total industry volume (TiV) to rebound in 2010 with a 4.5 per cent growth to a historic high of 555,000 units due to an improved economic outlook and rising consumer sentiment.

Kavan Mukhtyar, partner and head of the automotive and transportation practice, Asia Pacific, Frost & Sullivan, said that the vehicle sales will also be driven by replacement car buyers.

Mukhtyar said the assessment of the 555,000 can be achieved provided there is no substantial increase in interest rates which may result in some buyers postpon-ing their purchases or opting for cheaper models.

He added that a substantial number of Malaysians who purchased their vehicles from 2005 may look at replacing their cars in 2010.

"Prospective buyers who deferred their purchases last year are also expected to replace their cars in 2010 as the economy recovers."

He also said that vehicle sales will be aided by the key models launched late last year, such as Perodua Alza and Kia Forte. Proton's new C and D segment models, scheduled to be launched this year, will also boost
vehicle sales growth.

He added that Frost & Sullivan continued to believe that Malaysia's significant young population will provide an impetus for vehicle sales growth in the long term.

Mukhtyar also foresees that the number of first-time car buyers will increase in the next few years and this will be a key growth driver for entry level cars.

"MPVs will be one of the fastest growing segments, increasing 12.7 per cent year-on-year in 2010 to 68,000 units due to the intense competition among Proton Exora and Perodua Alza."

Passenger cars will be the slowest growth segment due to a lack of new mass market models as well as some
passenger car customers opting for the entry level MPVs.

However, passenger cars will remain the biggest contributor to the Malaysian total vehicle sales, accounting for about 75.3 per cent.

The demand for commercial vehicles is expected to increase by five per cent year-on-year to 53,345 units while 4x4 sports utility vehicle is likely to grow 7.9 per cent year on year to 11,210 units.

Mukhtya added that there will be a continued interest and development in electric vehicles and hybrid car makers but is expecting negligible demand by consumers in Malaysia.

Frost & Sullivan expects vehicle sales in 2009 to end 3.1 per cent lower year-on-year at 531,000 units as compared to its earlier forecasted TiV of 501,500 units.