MAA: Car dealers posted RM14b losses due to plunge in car sales

MAA president Datuk Aishah Ahmad said local automotive industry had suffered huge losses since motor vehicles production plants, distributions centres and sales centres especially in Klang Valley were halted since June 1, 2021.

KUALA LUMPUR: Car dealers in the country posted total losses of more than RM14bil in June and July due to plunge in sales of vehicles in the domestic market, revenue loss from the closure of showroom.

Following the movement control order (MCO), the Malaysian Automotive Association (MAA) said on Monday the local automotive industry had suffered huge losses.

Motor vehicles production plants, distributions centres and sales centres especially in Klang Valley were halted since June 1, 2021.

The MAA, whose members have around 1,300 dealers throughout the country, said the shutdown affected not only the automotive companies but it had wider repercussions on the entire automotive eco-system nationwide.

“Sales and production of motor vehicles for the past 2.5 months had been greatly hampered. Based on MAA’s latest statistics, sales amounted to only 1,921 units and 7,086 units for June and July 2021 respectively,” MAA said.

On average, sales or better known as total industry volume or TIV is between 45,000 to 50,000 units per month.

Total industry production for June and July 2021 were only 276 units and 2,775 units respectively which was a sharp decline compared with the average total production of between 40,000 units and 50,000 units per month.

The MAA said the most severely impacted by the lockdown were car dealers of MAA members particularly the smaller ones, which rely solely on incomes from the sale of new vehicles.

It added many of them are facing severe cashflows problems and have difficulties retaining their employees especially those sales advisers.

MAA president Datuk Aishah Ahmad said: “Our members had also lost much in terms of revenue from exports of vehicles and components, and sales of spare parts locally. All in all, these losses had been very substantial and unprecedented.”

“Total losses for the past two months (i.e., June and July 2021) was more than RM14 billion. This is just only from sales of vehicles in the domestic market. Our members had also lost much in terms of revenue from exports of vehicles and components, and sales of spare parts locally. All in all, these losses had been very substantial and unprecedented.”

Hoping to put behind the severe impact from the MCO, the MAA thanked the government especially the Ministry of International Trade and Industry (MITI) for the re-opening of a number of economic activities including sales and production of motor vehicles in states under Phase One of the National Recovery Plan effective Monday.

“The industry cannot sustain itself if the shutdown is prolonged. Many of us are bleeding. We have used up much of our savings over the past one year. So, it is a huge relief that finally we are allowed to resume our businesses and to revive our industry,” she said.

As the Covid-19 vaccination, Aishah said the MAA members had registered for the Covid-19

immunisation programmes for their employees.

Many companies had started their vaccination programmes to complement the government’s efforts to get as many people as possible to be vaccinated by October.

Many MAA member companies’ employees have already received at least one dose of the COVID-19 vaccine while a few companies had almost all their employees been fully vaccinated by now.