Lower commercial vehicle sales drag November TIV down

By RAHIMI YUNUS / Pic By BLOOMBERG

Lower sales volume in commercial vehicle segment dragged the total industry volume (TIV) in November 2018 down 18.5% year-on-year (YoY) to 4,918 units compared to 6,032 units recorded last year.

According to statistics by the Malaysian Automotive Association (MAA), passenger-vehicle segment posted flat growth on the same month.

Passenger-vehicle sales were flat with a slight increase by 209 cars, or up 0.5% YoY, to 43,364 units from 43,155 units for the same month last year.

Overall, TIV for November 2018 was at 48,282 units, 1.8% or 905 units lower, from 49,187 delivered last year.

However, production increased by 18.8% YoY to 50,304 units in November from 42,358 units recorded for the same month in 2017.

For the 11-month period, TIV rose 5.5% to 550,526 units from 521,906 registered in a similar period last year, pushing the volume towards this year’s estimate of 585,000 units.

MAA expected sales volume in December to be slightly higher than last month on aggressive year-end promotional campaigns.

The Malaysian Reserve reported that demand from the construction sector had declined between 15% and 20%, which resulted in many companies switching to a “wait-and-see” mode before buying any new assets and equipment, according to Isuzu Malaysia Sdn Bhd commercial vehicle division COO Atsunori Murata.

Murata said the reviews of various multibillion ringgit infrastructure projects that led to either cancellations or deferments have slowed down the demand for commercial vehicles in the country.

He said the soft commercial vehicle market has been, however, offset by increasing demand from the logistics and transportation sectors, mainly driven by an e-commerce boom.

The automotive players are optimistic that the industry will achieve the 585,000 projection in 2018.

Sales were largely boosted by consumers’ advanced purchase during the three-month tax holiday from June to August.

The automotive sector sold 198,518 vehicles during the zero-rated Goods and Services Tax (GST) period, almost 48,000 more compared to June-August 2017, as consumers locked on the opportunities of not paying 6% consumption levy for their purchases.

The Sales and Services Tax (SST) came into effect on Sept 1, but original equipment manufacturers were unable to finalise their final vehicle prices then as discussions were ongoing with the Royal Malaysian Customs Department on matters pertaining to the computational method under the new tax system.

Despite the delay, car manufacturers eventually surprised the market with lower car prices under 10% SST compared to the 6% GST.

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