Mixed response to sales

Malaysian Automotive Association (MAA) president Datuk Aishah Ahmad (pic) says the MCO 2.0 will have a significant impact on car sales.

PETALING JAYA: The implementation of the second movement control order (MCO 2.0) is expected to have a minimal impact on vehicle sales, but a prolonged lockdown could once again end up hampering total industry volume (TIV) severely.

An analyst said the restrictions under MCO 2.0 aren’t as stringent as the first one that was implemented in March 2020.

“For now, the MCO 2.0 is limited to certain states, so car companies are not completely restricted from doing business altogether in the country.

“Furthermore, the International Trade and Industry Ministry has also given the green light to the aftersales sector, which would allow automotive firms to operate their service centres and workshops, even in states where the MCO is implemented.”

Another analyst said some car companies will be hit harder than others.

“For instance, Proton has a plant in Tanjung Malim (Perak), which is under the conditional movement control order, so operations will not be as severely affected as say, Perodua, which has a plant in Rawang (Selangor).

“Also, the MCO 2.0 is for two weeks. Yes, there will be an impact but it will be minimal. However, an extension of the MCO will have dire consequences.”

Malaysian Automotive Association (MAA) president Datuk Aishah Ahmad however says the MCO 2.0 will have a significant impact on car sales.

“Yes, there will be an impact as assembly plants and component parts manufacturers are not allowed to operate, as only sales and after sales of automobiles are allowed in the MCO-affected areas.”

Another analyst said the MCO will result in a disruption in sales for vehicle models that were launched in the final quarter of last year.

“Sales of models such as the Proton X50, (pic) Honda City and Nissan Almera, which were launched in the fourth quarter of last year and still enjoying brisk sales going into 2021, will end up getting affected.

“These models are volume-driven brands that will contribute significantly to TIV. Any planned launches in the early stages of the current quarter will also be impacted, ” he said.

The MCO 2.0 was reinstated yesterday in Selangor, Johor, Penang, Melaka, Sabah and the federal territories of Kuala Lumpur, Putrajaya and Labuan, following a sharp increase in Covid-19 cases.

The first MCO, which was implemented from March 18 to May 3, last year, had a significant impact on car sales.

This resulted in the government implementing a vehicle tax exemption in June last year to help spur sales.

Under the vehicle sales tax exemption, locally-assembled cars were exempted from sales tax while for imported cars, the sales tax was cut from 10% to 5%, until Dec 31,2020.

The government has announced that the tax exemption would be extended until June 30. Under the extension, the sales tax exemption percentage remains unchanged.

Year-to-date November 2020, the TIV is still far off compared with that of 2019, with total sales standing at 454,708 units compared with 549,439 units in the previous corresponding period.

The MAA is scheduled to have its first biannual meeting later this month to reveal the performance of the local automotive industry in 2020 and expectations for 2021.

Article type: metered
User Type: anonymous web
User Status:
Campaign ID: 18
Cxense type: free
User access status: 3


Did you find this article insightful?


33% readers found this article insightful

Next In Business News

AmInvestment maintains 'buy' on Serba Dinamik
World’s richest shake off crisis in record setback to inequality
Quick take: DNeX rises 9%, most heavily traded
Trading ideas: Toyo Ventures, DNeX, PLS Plantations, SC Estate, FGV
Kenanga maintains 'market perform' on CapitaLand
China was largest recipient of FDI in 2020
Saudi sovereign fund to double assets in next five years to US$1.07trl
Deutsche Bank starts probe in relation to engagement with some clients
Vietnam's Communist Party meets to pick new leadership, bolster economic policies
Online fashion retailer Boohoo to buy Debenhams brand

Stories You'll Enjoy