Car sales stymied by restrictions

On hold: Long storage of vehicles may leave the batteries flat and may require them to be refurbished. — AZHAR MAHFOF/The Star

PETALING JAYA: Salesmen and buyers are in a bind as the brakes have been slammed on vehicle production and retail activities due to the Covid-19 pandemic.

With the supply chain affected by movement restrictions and demand dampened by the ongoing public health crisis, the automotive industry has already revised downwards its total industry volume (TIV) forecast by 5.6% to 500,000 units.

If operations do not resume this month, the Malaysian Automotive Association (MAA) said it’d likely have to revise its target again.

Its president Datuk Aishah Ahmad said while bookings of new cars were picking up, logistics issues were still hindering the automotive industry from hitting the road to recovery.

“The number of bookings of new cars has increased, compared to in June.

“However, as far as stocks are concerned, no completely knocked down (CKD) cars are being produced currently, while completely built up (CBU) stocks are mostly tied up at the ports.

“There are issues as component parts are not available to produce cars.

“Long storage of vehicles may also leave the batteries flat and may require them to be refurbished,” she said when contacted.

Honda car salesman Fazly Hizwan said although service centres had now been allowed to operate, many buyers were not able to get the keys to their wheels while new car sales remain gloomy.

“There are those who have already paid the booking fees and had their loans approved, but we have only managed to get one or two cars registered since June.

“In terms of the number of bookings of new cars, my colleagues and I have collectively seen only about five to six bookings in total the last month,” he added.

Fazly said as factories were closed, new cars could not be assembled to be delivered to dealers.

“As such, we can only sell cars that are in stock, those that are already in the showrooms,” he said, adding that it has been about two months since fresh stock was brought in.

With the Sales and Services Tax (SST) exemption extended until the end of the year, he said that there were still people who expressed their interest in buying cars but were waiting until after movement restrictions were lifted.

“We also had some who cancelled their loans with the banks, and we understand because right now many people’s incomes are badly affected,” he added.

A car salesman who did not want to be named said that car companies are struggling to keep afloat during the pandemic due to halted operations in the production and retail sector.

“Firstly, showrooms are closed, and prospective customers usually go there to do test drives or to look at the vehicle colours.

“Moreover, it’s not just that the showrooms are closed, but also that the production of these cars is down,” he said, referring to automotive factories that have had to suspend operations.

He added that the car registration and inspection processes have also been slow-moving as appointments now need to be made at the Road Transport Department and Puspakom for crowd control.

“Due to current uncertainties and long waiting times, some customers have even changed their minds and decided to cancel their previous bookings, so there’s a loss of opportunity there,” he said.

Another car salesman who also wished to remain anonymous said the predicament faced by the car companies was “very tough”.

“Car salesmen have had to look for leads through social media platforms, other digital marketing channels, or through referrals.

“There is still demand for cars because there are customers who do want to utilise the SST exemption that is applicable for car sales until the end of the year, but the demand is still low.

“People want to wait and see. They don’t know when the movement control order will end and they are in fear of being retrenched or of having their salaries cut by their company,” he added.

Car buyer Sarah Wong said she has yet to receive her new car although she had booked it back in April, before the full movement control order was enforced.

“When I called up the car dealer, they couldn’t tell me when I would be able to get my car.

“I’m not the only car buyer affected. There’s a long waiting list ahead of me because the car brand is quite popular.

“So even when the sector re-opens, I still have to wait a while for my order to be fulfilled,” said the manager.

Wong said she had to purchase a new vehicle urgently as her current car, which she has been using for more than a decade, was starting to experience problems.

“I really needed to change my car because although I had sent it for repairs, it was starting to make some unfamiliar noises and was starting to give some problems,” she said.

Previously, MAA’s Aishah said the whole car industry supply chain had been hit badly, warning that many car dealerships would soon go under.

Tentatively, automotive original equipment manufacturers and dealers are likely able to operate under Phase Three of the National Recovery Plan (NRP), but Aishah said this may be too long a wait for industry players.

“MAA hopes that the government will allow factories and distribution centres for vehicles and spare parts, and new vehicle showrooms, to operate in Phases One and Two of the NRP,” she appealed.

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