Vehicle sales in Malaysia are expected to continue remaining steady in the second half of 2014, boosted by new model launches and aggressive promotional activities, say industry experts.

However, further credit-tightening measures by banks and the impending implementation of the goods and services tax (GST) could have an impact on sales.

"We expect the market to grow further in the second half of the year and would like to maintain our sales forecast of 675,000 units as of now," said a representative from a research firm. He said "quite a few new models" were expected to make their debut later this year.

"Honda and Nissan will both be shoring up their model line-up, as well as Proton and Perodua with their new hatchbacks. Original equipment manufacturers (OEMs) are also rolling out completely-knocked-down variants such as the Mazda 3 and Mazda 6 at lower price points. This, along with increased activity in energy efficient vehicle (EEV) space should spur demand further," he said.

Last month, Malaysian-owned Go Automobile Manufacturing (GAM), in partnership with China's Great Wall Motor (GWM), became the first company to be granted an EEV licence since the implementation of the National Automotive Policy in January.

GAM has commited to investing RM 2 billion (US$ 618.2 million) to manufacture EEVs.

An analyst from a bank-backed brokerage said vehicle sales would be buoyed by promotions from car companies, especially towards the later part of the year.

Towards year-end, most auto companies will look to clear their inventory.

The research firm said, however, further tightening of credit (interest rate hikes and tighter loan approvals) would reign in non-performing loans and possible subsidy rationalisation (resulting in fuel price increase) could have a restraining impact on the market.