52% drop in new Honda vehicle sales in Malaysia from May to July year-on-year

Honda Industry News Local News News

Honda Malaysia reports that the ongoing restrictions of the Full  Movement Control Order (FMCO) have impacted its business significantly, with sales of new vehicles falling by 52% during the May to  July 2021 (compared to the same period in 2020). In compliance with government orders, the Company has suspended its business operations. These include closures of showrooms, its marketing and sales office as well as the assembly plant in Pegoh, Melaka.

However, aftersales services are allowed to operate at selected authorised Honda dealerships nationwide. Conditions for operations are that only minimal manpower is allowed and appointments must be made in advance. The HondaTouch app provides an easy way to make an appointment. Standard Operating Procedures (SOPs) must also be observed and customers can only go to a service centre if it is within 10 kms of their home.

Showrooms cannot conduct business activities but selected authorised service centres (below) are permitted to provide aftersales support and emergency assistance.

Only 5,700 units sold in 3 months

“With only certain aftersales services allowed and sales and manufacturing operations halted, it is no surprise that sales have plunged. Honda Malaysia saw a decline of 52% in car sales for the year-on-year period of May to July 2021. We sold about 5,700 units in this period compared to close to 12,000 units sold in the same period last year when the country was under a Conditional Movement Control Order (CMCO) and then Recovery Movement Control Order (RMCO),” said Madoka Chujo, Honda Malaysia’s Managing Director and CEO.

She added that the company fully supports the Malaysian government’s efforts to curb the spread of COVID-19 by adhering to the restrictions. However, there is concern that a ‘domino effect’ is occurring on all 101 authorised dealers who face financial difficulties. There is the uncertainty of employment for sales and service advisors as  well as other staff. The sales advisors, especially, have been severely affected as their income is largely dependent on commissions earned through vehicle sales.

Salespeople in car companies are especially affected since much of their income comes from commissions for new vehicle sales. Right now, they can’t do any selling activities as showrooms remain closed.

Helping Honda associates

“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,” she said.

The company targets to achieve 100% of first dose vaccination for all its associates by mid-August 2021. As Malaysia has one of the world’s fastest vaccination rates, the company hopes to achieve its vaccination target and subsequently the nationwide vaccination programme will help create a safer environment for Malaysians. “Honda Malaysia is appreciative of the hard work of all the frontliners who have been working tirelessly to help fight the pandemic,” Ms. Chujo added.

The Honda Malaysia assembly plant in Melaka is presently shut down in compliance with the FMCO.

Effect on local suppliers too

She also revealed that the prolonged business closure has impacted Honda Malaysia’s new model production due to no testing conducted in the manufacturing facility. Furthermore, the company’s supply chain and export of parts are also affected.

“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.

Honda Malaysia hopes that early resumption of the automotive sector activities will be possible under strict SOPs and guidelines set by the government. This can avoid the long-term impact such as retrenchment of employees and can help to prevent potential business closures among the supply chain.

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