Car sales fall again in Malaysia but industry expects turnaround in 2022

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KUALA LUMPUR – The sales of new motor vehicles in Malaysia fell for the second consecutive year in a row in 2021, an indication of how the Covid-19 pandemic has disrupted the economy.

The total industry volume (TIV) registered in 2021 was 508,911 units, a decrease of 4 per cent over the 529,514 units in 2020.

But the decline was less than the 12.4 per cent recorded in 2020.

The imposition of movement curbs has had a negative impact on the economy, said Malaysian Automotive Association (MAA) president Aishah Ahmad.

“Other factors which adversely affected our economy, and in turn our automotive market, were the supply chain disruptions, and the massive floods in several states in December 2021. All these factors contributed to another extremely tough year, not only for the automotive sector, but many other industries as well,” she told a virtual news conference on Thursday (Jan 20).

The widespread flooding from mid-December displaced thousands and killed at least 54 people.

About 5,000 flood-hit cars had been sent for repairs, although numbers were still being compiled, Datuk Aishah said.

The relaxation of Covid-19 restrictions, beginning from October last year, has contributed to improved sales of new vehicles, including commercial ones that are needed for the running of businesses, she said.

The extension of a sales tax exemption incentive until Dec 31, 2021, also helped to sustain the demand for new passenger vehicles, added Ms Aishah.

Under the Pemerkasa Plus economic stimulus package last year aimed at tackling economic challenges during the pandemic, the government allowed a sales tax exemption of up to 100 per cent for completely knocked down passenger vehicles and 50 per cent on completely built-up ones.

It has since been extended to June 30 this year.

The top-selling cars for the year remained Malaysian makes Perodua and Proton, which together had a combined market share of 59.3 per cent, while Toyota overtook Honda to come in third place.

Last year, the sales of passenger vehicles registered a decline of 5.9 per cent.

The sales of commercial vehicles, on the other hand, grew by 15.9 per cent to reach 56,248 units, due to a rise in demand as companies anticipate an economic rebound.

MAA expects automotive sales to improve in 2022, with 17.9 per cent growth, fuelled by an improvement in the economy, and a continuation of the sales tax exemption in the first half of the year.

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