PETALING JAYA: Total vehicle sales continued its upward trajectory for the sixth consecutive month this year in November, rising 7.4% to 56,489 units from 52,584 units in the previous corresponding period, as the government’s tax exemptions and aggressive promotional campaigns by automotive companies continued to drive sales.
Despite the year-on-year pick-up in sales, November’s total industry volume (TIV) was 0.3% lower on a month-on-month basis compared with October, said the Malaysian Automotive Association (MAA).
The association said sales in November were spurred by the government’s sales tax exemption incentive for passenger vehicles and new model launches.
Year-to-date November, TIV is still far off compared with last year, with total sales standing at 454,708 units compared with 549,439 units in the previous corresponding period.
On the outlook for December, the MAA said sales volume is expected to be much higher than November’s.
The association said the higher sales will be spurred by continuation of the impetus from sales tax exemption incentives for passenger vehicles, as well as the ongoing aggressive promotional campaigns by car companies.
Under the Short-Term Economic Recovery Plan (Penjana) announced by Prime Minister Tan Sri Muhyiddin Yassin in June, locally-assembled cars will be fully exempted from the sales tax, while for imported cars, the sales tax will be cut from 10% to 5%, until Dec 31.
An analyst said he expects this month’s vehicle sales to surpass total sales achieved in December 2019, as buyers will want to capitalise on the final month of the sales tax exemption.
“With the tax exemption ending at the end of this month, we believe many would want to make the best of the remaining time that’s left.
“Since the tax exemption was announced in June, sales have been higher every month on a year-on-year basis. We expect December to be no different.”
In a report last month, MIDF Research said the sustained growth in TIV so far is still largely driven by the national cars.
“The overall sustained strong TIV trend underscores our thesis of an inflection point in sector earnings from the third quarter of 2020, driven mainly by the tax holiday incentives, generous cash transfers to consumers under the stimulus packages, a low interest rate environment and a gradual underlying macro improvement.”
In July, the MAA announced that it was revising upwards its vehicle sales target for the year by 17.5% to 470,000 units as the grim economic outlook is likely to be buffered by the various incentives recently announced by the government.
Nevertheless, the projection would not only mean that sales this year would be a 22% contraction from 2019’s 604,287 units sold.
It would also be the first time in 13 years since TIV failed to surpass the 500,000-unit mark.
In April, the MAA revised downwards its 2020 TIV forecast to 400,000 units from the 607,000 units it had projected in January.