Automotive market likely to rebound in 2021

TIV for this year is projected at 570,000 units, an increase of 8% or 40,566 units compared to 2020

by S BIRRUNTHA / pic by MUHD AMIN NAHARUL

THE Malaysian Automotive Association (MAA) is optimistic that the country’s automotive market will recover with a higher total industry volume (TIV) target this year.

Its president Datuk Aishah Ahmad (picture) said TIV for this year is projected at 570,000 units, an increase of 8% or 40,566 units compared to 2020.

She added that of the total, 513,000 units were from passenger vehicles while the rest were from commercial vehicles.

“Automotive sales will be spurred by the recovery in the global and local economy, the continuation of the sales tax exemption incentive for passenger vehicles under the short-term National Economic Recovery Plan (Penjana) package until June 30, 2021, and lower hire purchase loan interest rates.

“Coupled with the many economic stimulus packages initiated by our government, MAA is optimistic that the local automotive market will rebound this year,” she said in a virtual media briefing on the motor traders and manufacturers’ performance for 2020 yesterday.

Aishah said new models that offer the latest specifications, design styles and competitive prices would also assist in sustaining buying interest.

Apart from that, she noted that aggressive promotional campaigns by car companies and the rollout of Covid-19 vaccine will also boost sales.

Meanwhile, MAA said a higher than expected performance in the last quarter of last year helped reduce the expected decline in the TIV for the full year of 2020.

It added that the total sales in the last three months of last year saw a sterling increase to 184,121 units compared to 161,296 units achieved in the third quarter of 2019.

However, on the whole, the TIV registered in 2020 was 529,434 units, a decrease of 74,847 units or 12.4% compared to 2019 with 604,281 units.

Commenting on this, Aishah said despite a double-digit drop in TIV, it was nonetheless, a good achievement for the local automotive industry given the extremely challenging business environment.

“It was higher than what MAA had forecasted at 470,000 units.

“The sales tax exemption announced by the government effective from June 15, 2020, boosted demand and drove sales in the second half of the year,” she added.

Under the Penjana package, the government has agreed to exempt sales tax up to 100% for completely-knocked down passenger vehicles and 50% on completely built up passenger vehicles.

In terms of segment, passenger vehicles declined by 69,212 units or 12.6% last year, while the commercial vehicles segment registered a decline of 5,635 units or 10.4%.

The production of new vehicles in 2020 also decreased by 86,466 units or 15% totalling 485,186 units compared to 571,632 units in 2019.

Aishah said the drop in production volume was mainly due to the enforcement of the Movement Control Order (MCO) in March 2020 and also in tandem with the lower overall sales in the 2020.

She added that the industry lost over two months of vehicle production last year.

Nevertheless, MAA expressed its appreciation to the government for listening to the industry’s plights and providing all the support to ensure the continuance of business activities and the survival of the automotive industry.

The association also thanked the government for agreeing to include the automotive industry (vehicles and components manufacturing and production) as one of the essential services that is allowed to operate during the current MCO.