Honda Malaysia’s May-July 2021 sales fell 52% y-o-y, business chain affected by extended Covid lockdown

Honda Malaysia’s May-July 2021 sales fell 52% y-o-y, business chain affected by extended Covid lockdown

The automotive industry has been severely affected by the lockdowns imposed to curb the spread of Covid-19. There are many levels in the supply chain, and with factories closed, car manufacturers, parts suppliers and dealerships are all lying idle. They can’t make the cars, and the showrooms have no cars to sell.

Honda Malaysia (HM) has big operations in Malaysia, with a sizeable factory in Pegoh. Since the FMCO started in June, the Melaka plant has been closed along with the sales office in Petaling Jaya, Selangor, as well as all dealerships to comply with the government’s SOPs. Only selected after-sales services are allowed to run with minimal manpower and by appointment.

It’s no surprise then that sales have plunged. According to HM’s MD and CEO Madoka Chujo, sales fell by 52% for the year-on-year period of May to July 2021. That’s around 5,700 units compared to almost 12,000 units in the same period last year, when Malaysia was under the CMCO and RMCO periods.

Honda Malaysia’s May-July 2021 sales fell 52% y-o-y, business chain affected by extended Covid lockdown

Poor sales aside, there are many other business aspects that are affected. “The prolonged business closure has also impacted Honda Malaysia’s new model production due to no testing conducted in the manufacturing facility. Furthermore, the company’s supply chain and exportation of parts are also affected,” said Chujo, who started her stint here in April.

“The automotive industry supports a wide network of local components and parts suppliers that comprises a few tiers. These suppliers might not be able to sustain their operations and this will subsequently affect the overall supply chain. The current extended lockdown and no visibility on business resumption timeframe have impacted planning and overall investment of the automotive marques,” she explained.

As we detailed last month, the dealerships and their employees are feeling it the most. Honda’s 101 dealerships nationwide are facing financial difficulties and the uncertainty of employment for sales and service advisors, HM says. SAs, whose income largely depend on commissions, have been severely impacted.

Honda Malaysia’s May-July 2021 sales fell 52% y-o-y, business chain affected by extended Covid lockdown

“Honda Malaysia understands the hardship that the dealers and Honda associates are going through, and hence, the company is trying to do its best to assist them during the difficult times. One of the efforts is by registering Honda associates under the Public-Private Partnership Industrial Covid-19 Immunisation Programme (PIKAS) to expedite the country’s rate of vaccination,” Chujo said.

Honda is targeting 100% of first dose vaccination for all its associates by the middle of this month. The company is hoping for a resumption of the automotive sector under strict SOPs and guidelines set by the government, which will prevent long-term impact such as retrenchment of employees and potential business closures within the supply chain.

With a full range of CKD locally assembled models from the Accord to the Jazz, Honda Malaysia might be more affected by start-stop production and lockdowns than many other OEMs, but it is by no means the only victim of Covid-19 – the entire industry is hurting now. More on this topic here.

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Danny Tan

Danny Tan loves driving as much as he loves a certain herbal meat soup, and sweet engine music as much as drum beats. He has been in the auto industry since 2006, previously filling the pages of two motoring magazines before joining this website. Enjoys detailing the experience more than the technical details.

 

Comments

  • hazri on Aug 05, 2021 at 5:47 pm

    city’s sales drop because the new design and features not so appetizing, then people opt to new x50 or ativa. i thought civic’s sales rising due to many complaint of new civic design not sporty and ugly, but turn out the current one also ugly.

    Like or Dislike: Thumb up 7 Thumb down 0
  • Jeremy on Aug 05, 2021 at 6:17 pm

    Good excuse for your incompetence and arrogance in late introduction of new models. Your new City is 1 year late, your new Civic is still far away, new Jazz unknown, new HRV nobody knows. You deserve this downfall, so keep on going down and down.

    Like or Dislike: Thumb up 9 Thumb down 1
  • YB Albert on Aug 05, 2021 at 6:18 pm

    I read that construction sector was given greenlight to operate 2 weeks ago.
    Is the automotive sector a contributor to big clusters?
    I cant see the logic on reopening the construction sector while the car factories and showrooms are off limits.
    While understanding the need to prevent further virus spikes,it would appear that the classification of essential and non essential sectors is just to limit operational clusters and the number of outlets allowed to restart.
    If there is no scientific basis to restarting the auto sector,then the SAs better brace for massive layoffs and sell nasi lemak by the roadside.

    Like or Dislike: Thumb up 6 Thumb down 3
  • Ahmadjr on Aug 05, 2021 at 8:38 pm

    X50 >>> hrv. The only chance for honda now is to release their new hybrid models to sea market with reasonable price

    Like or Dislike: Thumb up 0 Thumb down 0
  • Veyron Owner on Aug 05, 2021 at 9:08 pm

    I used to own the Civic EK9 back in 90s. Still one of the best car brands around , kudos Honda. Vtec kicked in yo’

    Like or Dislike: Thumb up 0 Thumb down 0
  • Vanguard on Aug 06, 2021 at 11:12 am

    Yeah…..it’s all COVID19 punye salah.

    Right, Honda?

    Like or Dislike: Thumb up 1 Thumb down 0
 

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