Car sales dip 52% post-tax holiday

By RAHIMI YUNUS / Pic By TMR

Vehicle sales in September plummeted by 52% compared to the last month of the tax-free period, as consumers shied away from showrooms and uncertainties over the new consumption tax slapped on such purchases.

During the three-month tax-free period, vehicle dealers sold almost 199,000 units, while vehicle loan applications hit a record value.

However, total industry volume (TIV) slumped to just 31,241 units in September compared to 65,551 delivered in August 2018. Buyers had used the tax-free period to perform advanced purchases.

According to the Malaysian Automotive Association (MAA) passenger vehicle deliveries tumbled 52% to 27,022 units, or 28,750 fewer cars sold in September, compared to 55,772 achieved in August.

Commercial vehicle volume dropped 57% month-on-month to 4,219 compared to 9,779 units in August.

“Stocks of some vehicle distributors were depleted following overwhelming demand during the Goods and Services Tax-free period,” MAA said in a statement yesterday.

The volume in September was 23% lower year-on-year (YoY), or 9,715 lower than the same month last year.

However, TIV for the first nine months was 7% higher at 454,971 compared to the January-September 2017 period.

The total deliveries year-to-date is accounted for close to 78% of MAA’s TIV forecast this year at 585,000 units — short of 130,029 more needed to meet the projection.

Production dropped 3% YoY to 37,000 units in September from 38,213 achieved last year.

MAA expects volume for October 2018 to be maintained at the September 2018 level.

The Malaysian Reserve (TMR) reported that carmakers are bracing for a soft automotive market in the final months of the year as the dust settles after the three-month tax holiday ended.

MAA president Datuk Aishah Ahmad previously told TMR that the sales for completely knocked-down vehicles will not increase much for the next few months.

Honda Malaysia Sdn Bhd president and COO Roslan Abdullah told TMR the market is expected to decelerate by 20% in early October.

Meanwhile, Mercedes-Benz Malaysia Sdn Bhd VP of sales and marketing for passenger cars Mark Raine is anticipating a decline to continue up to the first quarter of next year, but the effect on the premium segment might not be as strong as it would be in the mass market.

The tax-free period from June to August saw customers’ excitement elevated with lower car prices that led to a much higher sales volume.

TIV jumped by 31.9% to 198,518 vehicles during the three-month period, almost 48,000 more compared to June-August 2017.