Carmakers fear sales drop on assembly line halt

The govt’s directive allows only repair and maintenance activities to be carried out in the automotive segment


LOCAL automakers are alarmed by the government’s recent decision to omit the assembly of automobile parts in its list of operable sectors, fearing it will impact vehicle sales this year as most companies are low on stock.

The automotive sector has been showing signs of recovery, with the exemption of sales tax translating into stronger sales volume in the second half of last year.

Malaysian Automotive Association president Datuk Aishah Ahmad said the association is appealing to the government to reconsider the restriction as it can lead to supply disruption in the short term.

“Our association is appealing to the National Security Council on this issue,” Aishah told The Malaysian Reserve (TMR) when contacted recently.

The Ministry of International Trade and Industry (MITI) on Tuesday released an updated list of sectors that are allowed to operate under the current Movement Control Order (MCO) phase.

The directive allows only repair and maintenance activities to be carried out in the automotive segment.

The initial list had included automotive manufacturing and after-sales services as essential industries, but was updated on Jan 12, limiting it to only automotive repair and maintenance.

MITI, when contacted, directed TMR to its website as there is no further clarification aside from the list it has made public.

Kenanga Investment Bank Bhd analyst Wan Mustaqim Wan Ab Aziz said he is still waiting for the final decision from the government as automakers are still in negotiation with MITI.

“Automotive is one of the most important economic sectors with a supply chain that stretches to thousands of auto parts suppliers.

“This decision will most likely affect thousands of employees in this sector with no certainty that the MCO will only last for just two weeks,” he told TMR.

The Malaysia Automotive, Robotics and IoT Institute (MARii) in a statement yesterday said another halt to operations in the automotive sector could see business recovery losing momentum.

The automotive community exported a total of RM13.1 billion worth of parts and components to regional markets in 2019, and exceeded the RM10 billion export figure mark in October last year amid challenges brought about by the pandemic.

MARii CEO Datuk Madani Sahari said the industry — from component manufacturers, after-sales service to toolmakers — practises a strong level of automation and lean production, allowing it to better adhere to Covid-19 guidelines.

Madani said the agency is ready to offer its expertise in the utilisation of technologies for the automotive sector to facilitate the resumption of operations.

The most immediate technology available at MARii is the Immu-SAFE tracker, an intelligent contact-tracing application, designed specifically for health management within industries operating during the pandemic.

He said this application, driven by big data and Internet of Things, is ready for immediate deployment.

“In conclusion, MARii reinforces its support for the automotive sector to resume its manufacturing sector in accordance with strict standard operating procedures.

“It will also continue to assist in mediating any discussions and solutions between authorities and the industry, as well as assisting in deploying solutions to chal- lenges faced by stakeholders in combating the pandemic, while keeping the economy sustainable for the future,” he said in a statement yesterday.

The automotive maintenance and workshops are listed as essential sectors, and are allowed to operate under the MCO. The country’s auto sector employs some 700,000 workers, according to MARii.

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