The Malaysian Automotive Association (MAA) has released sales and production figures for the month of August 2018, and the strong sales that we saw in June and July as a result of the government’s move to zero-rate the goods and services tax (GST) continued.

Sales in August totalled 65,551 units, which is 4% less than the 68,465 units achieved in July, which was the second highest monthly TIV achieved in the history of the local automotive industry. Last month’s sales were higher than the June total of 64,502 units, though.

Compared to the same month last year, August 2018 sales was 13,835 units or 26.8% higher. At 423,730 units, the year-to-date August 2018 TIV was 10% higher than the corresponding period in 2017.

Of course, this unnatural spike is due to the one-off tax holiday, and the MAA is expecting a hangover to start in September. It’s not so much because SST has kicked in, but because many accelerated their car purchases. The association of carmakers expects sales to be much lower this month as “much of the purchases had been concluded before the end of GST tax holiday period.”

The feared increase in car prices with sales tax effective September 1 wasn’t as drastic and across the board as initially thought by MAA and consumers, and many car companies have published SST-inclusive car prices that are lower than what buyers paid in the GST era. This could be a boost to the 2018 TIV and keep the sales momentum going.