KUALA LUMPUR, Malaysia (AP) — Auto sales in Malaysia fell unexpectedly by 0.9 percent in 2011 but will rebound to grow a modest 2.5 percent this year, underpinned by a robust domestic economy, an industry group said Tuesday.

Sales fell to 599,877 vehicles last year after production was disrupted by Japan's earthquake and tsunami in March and then by crippling floods in Thailand, said the Malaysian Automotive Association. Production fell 6 percent from 2010, it said. Japan and Thailand are key auto manufacturing hubs.

"As a result of the two natural disasters, the sales of new motor vehicles were much lower during the second and fourth quarter of 2011," said association president Aishah Ahmad. "We forecast a modest growth of 2.5 percent for 2012 because the Malaysian economy is expected to expand at a moderate rate of 4.8 percent."

The association, which groups some 40 car manufacturers and distributors, projected sales to rise to 615,000 vehicles this year, and to surge to 669,600 by 2016.

Aishah said the takeover of national carmaker Proton by local conglomerate DRB-Hicom Berhad was the right move.

DRB-Hicom, which distributes and assembles vehicles for Volkswagen, Mercedes-Benz and Honda, said Monday it would buy over national carmaker Proton in a 3 billion ringgit ($957 million) deal that would help revive Proton's flagging fortunes.

"The most important thing is for DRB-Hicom to improve Proton in terms of brand image, styling and technology," she said.

Once the king of the road, Proton has seen its market shares dwindle due to greater competition.

Compact car maker Perodua, which overtook Proton as Malaysia's best-selling car brand in 2006, retained its leadership in 2011 with a 30 percent market share, the association said. Proton was second with a 26.4 percent share.

Japanese carmaker Toyota Motor Corp. secured 14.5 percent of the market and Nissan Motor Co. with 5.4 percent.

Honda Motor Co.'s market share fell to 5.4 percent, from 7.4 percent in 2011, as its Malaysian plant was shut down late October after Thailand's massive floods sparked a parts shortage. Honda officials said production is expected to resume by March. Nissan Motor Co. had 5.9 percent.