Traffic volume in showrooms declines as people’s movements are restricted during the MCO

by RAHIMI YUNUS / pic by MUHD AMIN NAHARUL

VEHICLES sales in January dropped by 24% year-on-year to 32,829 units compared to 42,942 units due to the Movement Control Order (MCO).

The Malaysian Automotive Association (MAA) said traffic volume in showrooms declined as people’s movements were restricted during the MCO.

The association said most customers purchased vehicles in December 2020, thus reducing the stocks in January for certain carmakers.

It also said some part suppliers were shut down, which resulted in parts and components shortage for some companies.

Passenger vehicles comprised 28,872 units of the total industry volume (TIV) last month, while the commercial vehicle segment contributed 3,957 units.

The vehicle sales volume in January was 51% from the previous month of December 2020.

MAA expects sales volume in February to be lower than last month due to a short-working month.

The MAA data also showed total industry production declined by 12% to 39,666 units compared to 45,416 units in the same month last year.

It has forecast that the TIV will grow by nearly 8% to 570,000 units in 2021, underpinned by the projected GDP growth of between 6.5% and 7.5% in 2021 and continued support from the government. Automotive players have benefitted from the sales tax exemptions on vehicles, which have been extended until the end of June this year.

The government agreed to grant full sales tax exemption to completely-knocked-down passenger cars including MPVs and SUVs, and 50% for completely-built-up units.

The automotive market is expected to recover from the impact of the MCO 2.0 by the first half of the year (1H21), particularly after the scheduled nationwide Covid-19 vaccination programme.

Many carmakers have to adjust their sales and marketing strategy according to circumstances induced by the Covid-19 pandemic, particularly in increasing their online presence.

Automotive companies have suffered lower traffic to dealers’ outlets, but the situation has been compensated by virtual showrooms, which led to online bookings.