Car sales will be impacted as consumers stay home

Kedah , 07/07/2019 - The techicians are doing all the installation to BMW in Inokom manufacturing located in Kulim Kedah. The Inokom assembly plant in Kulim utilizes a plant within a plant concept which enables Sime Darby Motors to meet its customers' unique requirements and quality standards by having dedicated teams and facilities to cater to brands including BMW, MINI, Mazda and Hyundai. Credit to TMR / Picture by Arif Kartono

The expected weak unit sales will be partially cushioned by lower costs with the production closure, says analyst

by HARIZAH KAMEL/ pic by ARIF KARTONO

CAR sales are expected to be adversely affected following the Movement Control Order as showrooms shutter and consumers postpone big item purchases.

Under the National Security Council measures, non-essential services must cease to operate from today until March 31. The move will likely impact the automotive sector.

“It will definitely impact the auto industry, but sector players must abide by the government’s order for nationwide movement restrictions. But, it is too soon to forecast the loss,” Malaysian Automotive Association (MAA) president Datuk Aishah Ahmad told The Malaysian Reserve (TMR).

She said all MAA staff will be working from home following the order as announced by Prime Minister Tan Sri Muhyiddin Yassin.

UMW Toyota Motor Sdn Bhd said the company had planned to close its assembly plant for a week for periodic maintenance. However, it will extend its closure to two weeks as per the government’s order.

“Toyota is seeking a special exemption for its service centres to continue operations. However, the showroom will likely be closed during the announced period,” UMW said in a statement to TMR.

UMW will continue to assist customers and take orders through telephone, but there will be delays in the delivery of vehicles.

Kenaga Research analyst Wan Mustaqim Wan Ab Aziz said he expects weak unit sales on top of cautious spending on high value discretionary items.

“Sales for March 2020 should be weaker compared to March 2019. The trend has been seen since February 2020,” he told TMR recently.

He added that the expected weak unit sales will be partially cushioned by lower costs with the production closure as carmakers are using this time to perform factory maintenance.

Proton Edar Dealers Association Malaysia president Liew Vee Lee said Proton will shift to online services and capitalise on social media like Facebook to engage with customers.

“Overall, Proton dealers and principal showroom have a strong social media presence or online booking service,” he said.

Liew said customers will enjoy benefits for online booking made for the Proton X70.

Honda Malaysia Sdn Bhd will also temporarily close its plant in Pagoh, Melaka, sales offices and dealerships nationwide.

The company will resume business tentatively on April 1.

“Honda Malaysia will continue to monitor the situation closely and update accordingly. We would like to apologise for any inconvenience caused during this time,” it said in a statement yesterday.