PETALING JAYA: Local vehicle sales, which have been given a temporary boost by the tax exemption, could be further spurred by the introduction of several new models from various car companies.
This new range of models, largely catered towards the mass market, could potentially mark the start of a major car replacement cycle, as car buyers look to replace their existing vehicles.
RHB Investment Bank said in a report yesterday the recent launch of several volume models, such as Proton X50, Perodua Ativa, Honda City and Toyota Vios and Yaris could mark the start of a new replacement cycle.
“We expect Perodua and Proton to emerge as the biggest beneficiaries. Their entrance into the compact sport-utility vehicle (SUV) space, through the Ativa and X50 respectively, saw both models securing impressive bookings, reaffirming the continued buying interest in SUV models.”
Additionally, the research house said March’s total industry volume (TIV) could hit more than 60,000 units.
“Proton reported its best sales in 90 months, with 14,989 units sold (including exports) in March, while Perodua saw sales jump 47.3% to 24,433 units. Notably, the latter delivered 4,345 Ativa units in March, successfully dethroning Proton’s X50 and X70 SUVs at 3,513 and 2,337 units respectively.
“We believe other brands are likely to follow suit in delivering quarter-on-quarter and year-on-year sales growth in the current quarter, driven by the run-up to the Aidil Fitri festive period in May and end of the sales tax exemption window in June, as well as the low base from the previous corresponding periods.”
RHB said it does not think there will be a further extension of the ongoing sales tax exemption.
Under the vehicle sales tax exemption, which ends on June 30, locally-assembled cars are exempted from sales tax while for imported cars, the sales tax will be cut from 10% to 5%.
Total vehicle sales rose 4% year-on-year to 42,784 units in February, spurred by increased traffic volumes to showrooms during the month following the lifting of the movement control order (MCO) in certain states.
According to data by the Malaysian Automotive Association (MAA), sales volume in February was 30% higher month-on-month compared with January.
Year-to-date February 2021, total vehicle sales stood at 75,613 units compared with 84,030 units in the previous corresponding period.
At its first bi-annual meeting in January, 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 MAA projected TIV to grow 8% to 570,000, on the back of the renewed sales tax exemption and stronger economic recovery.