PETALING JAYA: Total vehicle sales dropped 24% to 32,829 units last month compared with 42,942 units in the previous corresponding period, mainly due to lower traffic volume to showrooms because of the implementation of the movement control order (MCO).
The Malaysian Automotive Association (MAA) said in a statement yesterday that most customers had also brought forward their sales in December, resulting in lower stocks in January 2021 for some companies.
An analyst from a local bank-backed brokerage said the lower year-on-year total industry volume (TIV) was within expectations.
“With the vehicle sales tax exemption initially slated to expire on Dec 31,2020, there was a rush for orders to capitalise on the deadline.”
He noted that the government only announced the extension of the tax exemption via a memo to the MAA and the Malaysian Association of Malay Vehicle Importers and Traders on Dec 29.
“If notice of the extension had come out a lot earlier, many people may have delayed their sales bookings, ” he told StarBiz.
According to the MAA, sales volume for January 2021 was 51% lower than December 2020.
It said the impact from the MCO, which took effect from Jan 13, resulted in short supply of components and parts for some companies.
Of the 32,829 units that were sold last month, 28,872 units comprised passenger vehicles, while 3,957 units consisted of commercial vehicles.
On the prospects for this month, the MAA said sales volume in February is expected to be lower than last month’s, mainly due to it being a shorter working month.
An analyst added that the implementation of the MCO will also have an impact on buying trends, at least in the short-term.
“Also, with the sales tax exemption now extended until June 30, many can afford to hold back their purchases for a few more months, ” he said.
Under the vehicle sales tax exemption, locally-assembled cars are exempted from sales tax while for imported cars, the sales tax will be cut from 10% to 5%.
At its first bi-annual meeting last month, the MAA said TIV had hit 529,434 units in 2020.
This was, however, 12% lower than the 604,281 units achieved in 2019.
The drop in TIV can be attributed to the disruptions to businesses as a result of the first MCO that was implemented in March last year to curb the spike in Covid-19 infections.
For this year, the association projects TIV to grow 8% to 570,000, on the back of the renewed sales tax exemption and stronger economic recovery.
MAA President Datuk Aishah Ahmad (pic) said last month that TIV may only surpass the 600,000 mark in 2022 as sales growth would be in tandem with economic performance, adding that any recovery would hinge on how quickly and effectively the Covid-19 vaccine could be rolled out.