With new car sales in Malaysia due to be almost zero in June, industry to lose around RM3.44 bil in revenue

With new car sales in Malaysia due to be almost zero in June, industry to lose around RM3.44 bil in revenue

New car sales may have dipped in May, but the situation is set to get a whole lot bleaker this month, what with showrooms nationwide closed as a result of the full movement control order (FMCO) that began on June 1 and has since been extended to June 28.

With virtually no new registrations expected this month, save the odd number of units in which car loans have already been approved pre-lockdown and a Letter of Undertaking (LoU) has already been issued, the situation is expected to mirror that of April last year, in which only 141 registrations were recorded.

The drastic halt will have a definite financial impact, as Berita Harian reports. Based on an average vehicle sales price of RM70,000 per unit, it is estimated that the country’s automotive industry is set to lose around RM3.44 billion in revenue due to the complete slump in sales this month.

While most manufacturers have introduced online purchasing platforms including e-showrooms, the constraints of the documentation process for loans and registrations will limit the number of sales transactions that will go through. In a research note to clients, Kenanga Research stated that only a few units will be able to be registered through the road transport department’s (JPJ) e-Daftar system for the purchase of vehicles, in which the loan has been agreed through a LOU.

With new car sales in Malaysia due to be almost zero in June, industry to lose around RM3.44 bil in revenue

In a brief statement to the publication, Malaysian Automotive Association (MAA) president Datuk Aishah Ahmad echoed the belief that registrations for June will be severely limited. “If there is stock in the showroom, companies can still register with JPJ online. However, I don’t think it will involve a large amount,” she said.

Despite the lack of sales in June, Kenanga Research believes that new volume-driven launches can possibly spur sales before the year is out, further boosted by the extension of the SST exemption until the end of the year and seasonal promotions from brands. It projected a total industry volume (TIV) target of 545,000 units for the year.

This sentiment was shared by CGS-CIMB, which said it still expected that revenue for automotive sector would rebound with a 34% higher net profit growth this year, with TIV performance being stronger in the second half of the year, supported by the tax exemption.

Meanwhile, TA Securities said the implementation of an effective vaccination program bodes well for vehicle sales. It expects that sales will regain momentum as a result of the economic recovery, an accommodative interest rate environment and the launch of new models, and forecast this year’s TIV to remain at 627,000, which is 18.4% higher than last year. In January, the MAA had forecast an 8% growth in the TIV this year to 570,000 units.

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Anthony Lim

Anthony Lim believes that nothing is better than a good smoke and a car with character, with good handling aspects being top of the prize heap. Having spent more than a decade and a half with an English tabloid daily never being able to grasp the meaning of brevity or being succinct, he wags his tail furiously at the idea of waffling - in greater detail - about cars and all their intrinsic peculiarities here.

 

Comments

  • Civic Turbo 2018 on Jun 24, 2021 at 6:44 pm

    I really hate when ppl spreading fake news. We are alright OK? Economy now is best in decades, said meaty

    Like or Dislike: Thumb up 25 Thumb down 3
    • Kancil Hybrid on Jun 25, 2021 at 1:21 pm

      Bila naik dipersalahkan kerajaan.
      Bila turun kenapa tak puji??
      Ada yg dah turun. Hutang dulu naik sekarang turun …

      Like or Dislike: Thumb up 14 Thumb down 6
  • yawnz on Jun 24, 2021 at 6:46 pm

    Used car sales will go up, apparently still unaffected by MCO and covid.

    Like or Dislike: Thumb up 11 Thumb down 3
  • mesin rumput on Jun 24, 2021 at 6:52 pm

    pagi jual kereta, petang jual durian

    Like or Dislike: Thumb up 4 Thumb down 1
  • erwin karim on Jun 24, 2021 at 6:58 pm

    Lost RM3.44 bil in 1month is OK. No buy car..No car loan so no problemo.

    Like or Dislike: Thumb up 12 Thumb down 2
    • Calvin on Jun 25, 2021 at 8:49 am

      Saving up for the rainy day isn’t so bad. More can go into downpayment when the FMCO ends and sales can restart.

      Like or Dislike: Thumb up 10 Thumb down 2
      • Sick&Tired on Jun 25, 2021 at 4:27 pm

        Question is when is it going to be over?! Almost 6 months and still nothing has changed. Factories which are the biggest contributers to covid cases are still allowed to operate.

        Using your logic, maybe we should allow the economy to run for 10 months in a year, and another 2 months we have MCO so that people can ‘save up money for down payment’!? Does that make sense!? And how about people who are losing jobs because of the shutdown!? How can they ‘save up money for down payment’!? You are a ‘genius’!

        Btw I am sure a genius will say that lockdown is required for the cases to drop. I don’t deny that, but why are so many businesses still open!? Why not just shut down everything for 2 weeks and give loan moratorium like the first MCO?

        Like or Dislike: Thumb up 9 Thumb down 10
        • Kantoi But Still Wanna Defend on Jun 25, 2021 at 7:26 pm

          On one hand you, with your other nick, complained business tadak, companies closing, tadak duit to beli makan. On this hand you complain companies are allowed to operate. Maybe your genius tells you companies can open but nobody inside. Wow. Plis come back to reality bruhh.

          Govt only allow essentials to remain open but those others that open themselves memang cari pasal. If you have something to gripe, then gripe against these selfish business owners but if they closes down then you will follow and grip about job losses. Memang tau you punya style tu.

          Like or Dislike: Thumb up 3 Thumb down 0
        • First MCO since Mac last year, alredi 1.5year still huru hara. Covid lives on, the Govt and sapoters live on another day. This Covid excuse musnt be left dead, else the weak fragmented Govt got no reason to stay on. Their survival logic is simple enough. While everyone else suffered and burn… your hutang your problem. Traitors never change colors.. Ade aq kesah, kuasa adalah matlamat mutlak. dark real truth….

          Like or Dislike: Thumb up 2 Thumb down 3
          • Make Malaysia Great Again on Jun 28, 2021 at 10:36 am

            Well this gomen prioritize human lives if your side prefers money over lives, well you guys can’t be trusted to run the gomen. Ever.

            Like or Dislike: Thumb up 0 Thumb down 0
        • Calvin on Jun 26, 2021 at 1:20 pm

          Well clearly you didn’t get the point so i will stop it here. Let’s help give constructive criticism instead of arguing here

          Like or Dislike: Thumb up 2 Thumb down 0
        • The question isn’t when is it going to be over, the main question is when can the cases reduced down to 4000, and we shouldn’t open before that. Lives matter more than money but to some people, like you, their money seems more important than human life and they only think about is money. They must have been stressed out by the pandemic new normal.

          Like or Dislike: Thumb up 2 Thumb down 0
    • Copy Paste on Jun 25, 2021 at 7:27 pm

      Copy paste: “It’s not really a loss in revenue, right? Sales would pick up in the coming months as those who wished to purchase during MCO would eventually purchase once MCO is lifted. So we shouldn’t say it’s a loss, more of a delayed sale. If this happened in Nov/Dec, this “loss” could possibly be a huge factor affecting the annual P&L but a mid-year “loss” is not really a loss.”

      Like or Dislike: Thumb up 2 Thumb down 1
  • Pak Cik Dah Konfius on Jun 25, 2021 at 12:24 am

    A couple of days back, Transport Minister Wee Ka Siong said everything ok. Senior Minister Azmin said our economy is recovering.

    Like or Dislike: Thumb up 11 Thumb down 6
    • Calvin on Jun 25, 2021 at 8:48 am

      WKS is talking about used car sales which isn’t affected since they can still do online transaction. Possibly due to new car sales has pretty much stop, used car sales otoh shoot up. So he wasn’t wrong.

      As for Azmin statement, there is more to our economy than just car sales ya know.

      Like or Dislike: Thumb up 9 Thumb down 4
      • Sick&Tired on Jun 25, 2021 at 4:20 pm

        What nonsense are you talking about!? How can used car sales not be effected!? How to transfer name when Puspakom is not operating!?

        In fact, used car sales are impacted more as buyers have to inspect and test drive the car to make sure there are no issues with the car as it is used.

        Like or Dislike: Thumb up 8 Thumb down 8
        • Copy Paste on Jun 25, 2021 at 7:18 pm

          Copy paste: “Dr Wee is doing a great job. If you cannot article properly, that is not his fault you know
          “All JPJ counters handling ownership change (tukar hak milik) will be closed, but online transactions can be done via e-auto or MyEG.”
          https://paultan.org/2021/06/01/jpj-puspakom-apad-to-close-during-fmco-60-days-leeway-for-lesen-road-tax-name-change-on-myeg-only/”

          Like or Dislike: Thumb up 2 Thumb down 0
  • Another MITI’s achievement.

    Like or Dislike: Thumb up 7 Thumb down 1
    • Dr Strange on Jun 26, 2021 at 11:13 am

      MITI prefers to keep the economy open but still, lives matters more.

      Like or Dislike: Thumb up 2 Thumb down 0
  • Navin on Jun 25, 2021 at 9:29 am

    It’s not really a loss in revenue, right? Sales would pick up in the coming months as those who wished to purchase during MCO would eventually purchase once MCO is lifted. So we shouldn’t say it’s a loss, more of a delayed sale. If this happened in Nov/Dec, this “loss” could possibly be a huge factor affecting the annual P&L but a mid-year “loss” is not really a loss.

    Like or Dislike: Thumb up 8 Thumb down 2
  • nvm…chip shortage anyway

    Like or Dislike: Thumb up 6 Thumb down 2
  • Robinhood on Jun 25, 2021 at 10:10 am

    It is wishful thinking that TIV will grow by 8%.

    Like or Dislike: Thumb up 1 Thumb down 1
  • YB Sam Look on Jun 26, 2021 at 3:59 pm

    Who cares, even if car sales collapsed also none of my business. What we know (truth really hurts) is the the demise of manual cars already imminent as our paria national car manufacturer will remove their brand new manual cars in their lineup – AFAIK, Iriz, Persona and soon to be Myvi – all MT variant are being sent to chopping board, next in line might be Saga, Bezza and Alza (Axia E cannot be included in MT car offering). Even 1st world country like USA and Japan and 3rd world country like India and Indonesia where traffic jam is few times worse than Klang Valley still provide manual option for their carbuyers unlike this country where lots of unskilled and unqualified bastards that shouldn’t be on the road jamming up the road and behave like hooligans.

    Like or Dislike: Thumb up 1 Thumb down 1
  • MASTERII on Jun 28, 2021 at 7:57 am

    INIKALILAH —-JOM UBAH
    SO HOW NOW???
    Happy ?
    before that u were Playing with rhetorics now the impact all Malaysian suffer..
    Good move!!! guys

    Like or Dislike: Thumb up 3 Thumb down 0
 

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