The Relationship between Macroeconomic Variables and Passenger Vehicle Sales in Malaysia

Abstract

This study aims to analyze the long-term relationship and causal relationship between macroeconomic variables and passenger vehicle sales in Malaysia. In this study, the monthly time series data from April; 2004 to December; 2010 is used. To achieve the objectives, the Vector Autoregressive (VAR) estimation method is applied. Results show that there is no significant long-term equilibrium relationship between sales of passenger vehicles with macroeconomic variables. For the short term, only significant IPI variable affects the growth of passenger vehicle sales in Malaysia.