Malaysiakini News

In Najib’s economy, the rich get richer and buy more BMWs

Ong Kian Ming  |  Published:  |  Modified:

MP SPEAKS | There has always been this disconnect between the healthy GDP growth figures which Najib and his cabinet like to talk about and the feeling among the people on the street that life is not improving for them. When I examine the car sales figures over the past five years, it shows that under Najib’s economy, the rich get richer and buy more Mercedes’ and BMWs while those in the B40 cannot afford to buy cars.

Passenger car sales in Malaysia has dropped from 576,657 units in 2013 to 514,769 units in 2018, a decrease of 61,978 units or 10.7 percent. This took place in a backdrop of what is supposedly a healthy and growing economy. Perodua, now the largest car seller in Malaysia, managed to buck this trend by increasing its sales slightly, from 196,071 units in 2013 to 204,887 units in 2017, an increase of 4.5 percent.

What surprised me was the finding that despite overall car sales taking a big hit, the sale of Mercedes’ and BMWs increased significantly during this period. Mercedes’ sales increased by a whopping 122.9 percent from 5,413 units in 2013 to 12,067 units in 2017 while BMW sales increased by 50.5 percent, from 7,057 units in 2013 to 10,618 units in 2017. Sales of Volvo cars also increased from 533 units in 2013 to 1,021 units in 2017, an increase of 91.6 percent, as shown below.

I also calculated the change in car sales for foreign non-luxury carmakers (Honda, Toyota, Nissan, Mazda, Kia, Subaru and others in the same category) as well as foreign luxury car makers (Mercedes, BMW, Volvo, Porsche, Lexus, Audi and others in the same category) and found similar trends. The foreign non-luxury carmakers experienced a slight decline in car sales, from 222,766 units in 2013 to 211,843 units in 2017, a drop of 4.9 percent. But the foreign luxury carmakers increased their overall sales from 19,067 units in 2013 to 26,958 units in 2017, an increase of 41.4 percent, as shown below.

These trends were in place even before the opening of the MRT Line 1 in July 2017 so it is difficult for BN to argue that fewer people are buying cars because they are using public transportation - which is not that cheap in Malaysia either.

These figures reveal what the person on the street is feeling. The economy is getting bigger but it is the rich who are mostly benefiting leaving the rest of us to have to struggle with increases in the cost of living.

ONG KIAN MING is MP for Serdang and head of Penang Institute. DARSHAN JOSHI is research analyst, Penang Institute.

The views expressed here are those of the author/contributor and do not necessarily represent the views of Malaysiakini.

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