Bank Negara defends rules

SOURCE: CLICK ME!

KUALA LUMPUR: Bank Negara has defended its move to impose responsible lending guidelines among financial institutions amid continued unhappiness from some automotive players that the new loan rules are affecting their sales.


The central bank said it was doing its job to manage household debt as it was expecting debt levels to increase this year.

“We are a banker and adviser to the Government, playing an active role in advising on macroeconomic policies and managing the public debt. 


“The guidelines are meant to avoid the excessive accumulation of household debt, particularly among households that are more vulnerable to income shocks,” it said in a statement, adding it did not see a need to review the guidelines.

(Italic: WELL SAID by BANK NEGARA!) 

Bank Negara also said that its job was to bring about financial system stability while fostering a sound and progressive financial sector within the country and at the same time promote a prudent conduct of monetary policy.

The central bank added that Western economies such as Australia and the United States had also duly adopted relevant measures after the experience of the US subprime financial crisis and the eurozone debt crisis.

Perodua and Proton Edar Dealers Association Malaysia (Peda) recently indicated, from the tone of statements made to the press, that they were not too happy with the responsible lending guidelines which have come into force since the beginning of this year.

In a statement issued recently, Perodua put the blame on Bank Negara's responsible lending guidelines after its year-on-year sales declined by 11% in March from 18,000 sold in the same month last year.

(BOLD: WHAT A SELFISH PEDA businessmen)

However, Perodua's sales in the first quarter this year have stabilised, easing 2.2% to 44,700 vehicles for the first three months of this year from 45,700 vehicles registered in the first quarter of 2011.

Peda president Armin Baniaz Pahamin said it would meet with local banks to iron out issues relating to Bank Negara's responsible lending guidelines.

END OF SOURCE...

Jeff's (otoreview) opinion: 

If your customer can't afford the Loan (to buy) then, EASY, dear Car Dealers/Distributors just don't sell to them.  If still want to sell then make it affordable. You just can't have the cake and eat it this time round. What a bunch of selfish businessmen.

For the buyers, what's your problem?  

if cannot afford to pay for a new D-segment new car then buy a new C-segment.  Or if cannot afford New car then buy a used car which I strongly recommend at the moment.  I don't see a point to complain about this issue!

OTOH Sales of premium cars accelerate

OTOH (ON THE OTHER HAND) Sales of Premium cars accelerate

SOURCE: CLICK ME...

PETALING JAYA: Positive consumer sentiment, strong purchasing power and minimal impact from Bank Negara's newly implemented responsible lending guidelines collectively helped boost sales of premium vehicles in February.


Prominent brands such as Mercedes Benz, BMW, Lexus, Volvo, Audi and Porsche registered marked sales increases in February versus the same month a year earlier.

“It is due to a combination of attractive sales and after-sales campaigns by manufacturers to clear 2011 manufactured cars and aggressive registration and delivery of orders,” said Frost & Sullivan Asia Pacific automotive and transportation practice principal consultant Rajaswaran Tharmalingam.

“Further, continuous novel efforts to increase sales by manufacturers and strong consumer sentiments made it a better month,” he added.

Malaysian Automotive Association (MAA) president Datuk Aishah Ahmad pointed out that Bank Negara's new lending guidelines, which came into effect on Jan 1, had little to no impact on buyers of premium vehicles.

“For this (premium) segment, even if the economy is affected, the impact would be little. Buyers from this segment have so much money that they can buy so many cars and getting their loans approved is not an issue,” she said after MAA's AGM on Friday.

Under the central bank's new lending guidelines, loans are now approved based on net income compared with gross income previously, in addition to which is the need for more documentation.

Aishah said the impact was more profound on the lower capacity passenger car segment.

“Some buyers from this segment may now need to combine their total income with their spouses just to qualify for a loan,” she added.

OSK Investment Research analyst Ahmad Maghfur Usman said sales of premium vehicles were buoyant in February on strong demand from new model line-ups introduced.

During the month under review, sales of Mercedes Benz vehicles increased to 466 units from 430 units in the previous corresponding period while BMW's sales grew to 383 units from 356 units a year earlier, according to statistics from the MAA.

In the same month, sales of Lexus vehicles more than doubled to 109 units from 52 units a year earlier while Volvo sold 95 units versus 55 units previously.

An industry observer said sales of Lexus was boosted by the demand for its CT200h hybrid, which has a 1.8-litre petrol engine and qualifies for the excise duty exemption that was announced under Budget 2011.

Audi more then doubled its sales to 115 units from 50 units a year earlier while Porsche increased its sales to 24 units from 16 units previously.

Rajaswaran said he expected a positive outlook for premium vehicle sales for the month of March.

“The outlook for premium cars in March would be encouraging and poised to increase, mainly driven by combination of on-going attractive sales and after-sales campaigns by manufacturers to clear remaining 2011 manufactured cars, a healthy order bank, new models appeal and the minimal impact of Bank Negara's responsible lending guidelines on premium consumers.”

Ahmad also said he was optimistic about premium vehicle sales in March.

“March will be better as business activities normalise,” he said.

Used car sales down 20%

PETALING JAYA: The sale of used cars in Malaysia dropped about 20% in January and February relative to the same months last year.

Federation of Motor and Credit Companies Association of Malaysia President Datuk Tony Khor attributed the decline mainly to Bank Negara Malaysia's tight lending conditions. 

Khor

Certain states are even experiencing (a drop) of 30%.

Both the new and used cars sales are down. 

"Other than the new guideline, other factors which affected sales included the on-going debt crisis in Europe which impacted consumer buying mode," he told reporters after the nationwide launch of the Interim Ownership Transfer System by Transport Minister Datuk Seri Kong Cho Ha here today.

The new system will enable a used-car dealer to take full responsibility for a car until it is sold to another party. 

Khor said the total used vehicle sales in January and February rose to 192,000 units versus 187,000 and 174,000 recorded in the same period last year and in 2010, respectively. 

"However, the total vehicle sales does not represent the used car business. This is because total sales would include motorcycles, taxis and commercial vehicles. 

"Usually, cars will make up some 40% of the total sales. However, we have no proper system to monitor the sales and purchase of a used vehicle except for data provided by the Road Transport Department, thus we do not have an exact figure," he said.

Khor added every year, between 450,000 and 500,000 used cars are sold in Malaysia.

He said there were about 5,000 used car dealers nationwide and 60 per cent of them were registered with the association. 
 -Bernama

Higher motoring premiums next year

The Star, Friday, February 25, 2011.
 
 SOURCE

PETALING JAYA: Motorists will need to pay more for their insurance premiums from next year under the new motor framework but will reap the benefit of faster claims.

Bank Negara assistant governor Abu Hassan Alshari Yahaya who announced this on Friday said the premiums were not expected to have a material impact on the low-income group and the increases would be “gradual”, spread over four years.

After 2016, the premiums would be liberalised and be determined mostly by market forces.

“The new framework which will encompass efficiency enhancement measures is also expected to improve time taken to settle claims from the current average of 1 year to 5 years to 6 - 18 months,” he said.

Abu Hassan stressed that the adjustment would be gradual and “manageable”, refuting a news report published by a local daily on Thurday which stated that motorists may see premiums rise by about 250% and 450%.

“That is totally incorrect,” Abu Hassan said.

Citing preliminary figures for certain segments, he said for motorcycles 100 cc and below, the increase would be between  an annual RM1-RM3.50 (for third party insurance) and RM1-RM2 (for comprehensive insurance)  whereas for cars 1,500 cc and below,  the increase would be between RM6 to RM34 (third party)  and RM7 and RM19 (comprehensive).

The amount of premiums paid would be dependable on factors such as the vehicle’s age and the motorist’s history of claims.

“The public can take some adjustments, the fact is that  insurance premiums have not been adjusted for a very long time,” he said.

He said engagements had been held with key stake holders  such as the police, hospitals and judiciary and a formation of a joint committee among these stake holders to oversee the effective implementation of the proposed framework’s efficiency enhancement measures would be established.

The current motor insurance rating framework has not been reviewed since 1978 and insurance companies have constantly raised the issue of third party motor insurance business being unprofitable given low premiums which did not commensurate with high claim costs.

According to Bank Negara’s presentations slides, the motor insurance business incurred an estimated annual loss of RM650mil as at 2009/2010.


End of article.


That's all folks, thanks for having the time and patience to read this blog entry.