Car dealers lost RM14b in 2 months, relieved at new rule


LOCAL automotive dealers lost over RM14 billion in June and July due to a significant drop in domestic vehicle sales as businesses were closed under the Enhanced Movement Control Order (MCO).

Malaysian Automotive Association (MAA) president Datuk Aishah Ahmad (picture) said its members, around 1,300 dealers nationwide, had also lost much in revenue from exports of vehicles and components as well as sales of spare parts locally.

“All in all, these losses had been very substantial and unprecedented,” Aishah said in a statement yesterday.

The local automotive players had to temporarily suspend their motor vehicles production plants, distributions centres and sales centres, particularly in Klang Valley from June 1, 2021.

The auto sector only registered 1,921 and 7,086 units in sales for June and July, respectively, according to MAA data.

These figures pale by comparison to a typical monthly sale of between 45,000 to 50,000 units.

MAA noted sales in July mainly came from Sabah and Sarawak where showrooms are allowed to operate under Phase 2 of the National Recovery Plan (NRP) and very minimal sales via online registration.

Likewise, the automotive production recorded in June and July were only 276 and 2,775 units, respectively, compared to an average total production of between 40,000 to 50,000 units per month.

“The industry cannot sustain itself if the shutdown is prolonged. Many of us are bleeding. We have used up much of our savings over the past one year.

“So, it is a huge relief that finally we are allowed to resume our businesses and to revive our industry,” Aishah said.

The government recently announced 11 activities allowed to reopen under NRP Phase 1.

The 11 activities are car wash centres, electrical and electronic shops, household items and kitchenware shops, furniture shops, sportswear shops, car accessory shops, car sales and distribution centres, morning markets and agricultural markets, fashion and accessory centres, jewellery shops, hairdressers, barbers and beauty parlours (only for haircuts).

“On behalf of all MAA members, we thank the government, especially the Ministry of International Trade and Industry for allowing the automotive sector to operate,” Aishah said.

Despite a huge drop in sales in the past two months, year-to-date total industry volume until July stood at 256,215 units, an increase by 10.2% from 232,423 units for the corresponding period last year, due to low base factor.

Carmakers suffered huge losses when they had to shut down operations during the first MCO imposed at the onset of the outbreak in 2020.

MAA expects sales in August would be higher than in July as showrooms in many states including key states like Selangor and Kuala Lumpur are allowed to operate, subject to standard operating procedures and based on employees’ vaccination rate. Aishah said MAA members had registered for the Covid-19 immunisation programmes for their employees.

She also said many companies had started their vaccination programmes to complement the government’s efforts to get as many people as possible to be vaccinated by October.

“Many MAA member companies’ employees have already received at least one dose of the Covid-19 vaccine, while a few companies had almost all their employees been fully vaccinated by now,” she added.