The Malaysian Automotive Association (MAA) has announced its Council members for 2023/2024 after the association’s recent Annual General Meeting. Leading the Council as President is Mohd Shamsor Bin Mohd Zain, who succeeds the late Datuk Aishah Ahmad.
Encik Mohd. Shamsor, who is the Director, Marketing Group & ITSD at UMW Toyota Motor, said the new MAA team will continue with the good work undertaken by Datuk Aishah Ahmad. “We will uphold the strong working relationships with key stakeholders such as government ministries and agencies, as well as the media. Together with all MAA members, we will grow this association from strength to strength, for the good of our industry, society and country. I look forward to the continued strong support from all MAA members as we contribute to the robust development of the nation’s automotive industry,” he said.
After the drop at the start of the year, sales for almost all brands picked up again in February, even though this is the shortest month of the year and typically sees low sales. However, with the urgency to deliver vehicles to those customers who had booked prior to the June 30 2022 deadline for sales tax exemption, many companies rushed to get vehicles registered.
Data source: Monthly reports of Malaysian Automotive Association.
Among the non-Malaysian makes, Toyota has again gotten off to strong start as an indication of its determination to retain the lead in the segment. However, Honda will be putting in a strong challenge this year as it has announced that there will be three all-new models, one of which is known to be the WR-V compact SUV. This takes the brand into Perodua and Proton territory as it will be a rival for the Ativa as well as the X50.
The erratic production volumes reflect the disruptions caused by shortage of parts, especially microprocessors which are needed for the many electronic systems in today’s vehicles. Just one microprocessor not available and the vehicle cannot be completed. Some manufacturers have even taken to sending vehicles out with some features omitted due to the systems lacking the necessary microprocessor. However, some stability is beginning and the plants are able to push out more vehicles.
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March should see higher numbers as well since it is the final month for deliveries of those long outstanding orders. It’s also usually a strong month because it is the end of the financial year for some car companies, so there is maximum effort to close their books with the best numbers of the year. And there are also promotions for the Hari Raya festive season to attract buyers.
It is with sadness that we report that Datuk Aishah Sheikh Ahmad, President of the Malaysian Automotive Association (MAA), passed away earlier today. She had performed her umrah and was due to return to Malaysia from Jeddah tomorrow.
Datuk Aishah was one of the longest-serving people in the Malaysian auto industry which she spent her entire working life in. She entered the industry in the mid-1970s after graduating from MARA, starting off as an executive trainee at the Inchcape Motor Group. She moved through the group in various roles in marketing and was the first woman to attain the position of Group Marketing Services Manager in the late 1970s.
Source: Monthly reports of Malaysian Automotive Association Note: BMW, Mercedes-Benz and MINI data is only provided quarterly so the cumulative volumes shown are only for January to September 2022.
Data source: Monthly reports of Malaysian Automotive Association
Going into the final quarter of 2022, the Total Industry Volume (TIV) of new vehicle deliveries for the month of October was 10% lower than the month before but still above the 60,000 level. 61,002 units of vehicles were delivered nationwide, compared to 67,698 units in September.
The 61,002 units were made up of 54,498 units of passenger cars (excluding pick-up trucks) and 6,504 units of commercial vehicles, including pick-up trucks.
Source: Monthly reports of the Malaysian Automotive Association (MAA).
The Total Industry Volume (TIV) of new sales in May was 12% lower than the TIV for April, dropping below 50,000 units. Contributory factors were the reduced number of working days due to the Hari Raya Aidilfitri holidays but of great impact was the shortage of new vehicles to deliver.
Many car companies have a large number of orders but cannot fulfill them as the auto industry continues to be affected by the global microprocessor shortage and logistics delays. As the microprocessors are essential for the many electronic systems in today’s cars. their inavailability means the cars cannot be completed.
Compared to the same month in 2021, the TIV this year was 5% higher and when the cumulative volume for the first 5 months of 2022 is compared to the same period in 2021, the deliveries are higher by 7.4% at 264,656 units.
Although there is the microprocessor shortage and other issues affecting production, the assembly plants around the country were able to produce 16% more vehicles than for the same month in 2021, This year, total output was 49,154 units, made up of 45,518 passenger vehicles (excluding pick-up trucks) and 3,636 commercial vehicles (including pick-up trucks). The latter segment saw a bigger increase of 54% in volume compared to May 2021.
The Malaysian Automotive Association (MAA) expects sales in June to be higher. With no further extension of the sales tax exemption confirmed, many car-buyers will be rushing to place their bookings before the end of the month when the exemption ends. However, the Finance Ministry recognises that the industry has been having difficulties supplying vehicles to meet the backlog of orders and will allow those who book before June 30, 2022 to enjoy the exemption even if they do not get their new vehicle by then. However, they must get it registered by March 31, 2023.
Notes: BMW and MINI sales data are only provided by the company on a quarterly basis. Mercedes-Benz Malaysia does not wish provide its sales data. Data source: Malaysian Automotive Association
Although 2021 was the second year of the COVID-19 pandemic and the auto industry had been hoping to recover from the impact of the lockdown in 2020, the total number of new vehicles sold was actually lower. Where the Total Industry Volume (TIV) in 2020 was 529,514 units, the TIV for 2021 was 4% lower at 508,911 units.
Nevertheless, the usual final-month push by car companies saw the December having the highest sales volume of the year with 65,184 vehicles delivered nationwide. This contributed to the year’s TIV going past the 500,000-unit level that had been forecast by the Malaysian Automotive Association. While 2021, like 2020, had long periods when business activities – including motor vehicle sales and production – were suspended, the rate of recovery in 2021 was not as quick as the year before.
New vehicle sales in Malaysia from 2017 to 2021.
Commenting on the sales figures, MAA President Datuk Aishah Ahmad said that the measures taken by the government were important factors. “The much smaller TIV’s contraction recorded in 2021 [compared to 2020] can be attributed to the measures and wisdom of our government in balancing between saving lives and jobs so as not to jeopardize the domestic economy,” she said.
Owing to the relaxation of the movement control orders, many economic sectors were allowed to re-open for businesses. This helped to improve business confidence which contributed to more sales of new vehicles, including commercial vehicles which are much needed for the running of businesses. Having deferred purchases during 2020, many companies would have made their fleet purchases during 2021 to support their business activities.
The sales exemption has helped to encourage many to buy new vehicles, contributing to the recovery of the industry.
“The extension of the sales tax exemption incentive under PEMERKASA+ package till December 31, 2021, also helped to sustain the demand for new passenger vehicles,” added Datuk Aishah. “Under the PEMERKASA+ package, the government agreed to exempt sales tax up to 100% for completely knocked down (CKD) passenger vehicles assembled in Malaysia, and 50% on passenger vehicles that were imported in completely built-up (CBU) form.
In the passenger vehicle segment, it was evident that even more buyers preferred SUVs, mirroring the global trend which has had manufacturers hurriedly launching new SUV models. In the case of Malaysia, passenger car sales declined by about 19.7% while SUVs grew by 43%. The other segments – MPVs (which used to be second to passenger cars) and window vans – also saw lower sales although not significantly different from their 2020 volumes.
Overall, passenger vehicle sales fell by 5.9% to 452,663 units but this was not entirely due to reduced demand. Some companies also experienced stock shortages due to the semiconductor microchip supply issues which affected their local production or production at overseas factories from which they import their vehicles. It only takes one part being unavailable to prevent a vehicle from being completed and leaving the factory.
The commercial vehicle segment (which includes pick-up trucks)) fared better, recording an increase of 15.9% to a volume of 56,248 units, which represented 11% of the TIV. In this segment, pick-up trucks registered the biggest increase of 20.9% to 40,736 units, account for 72% of the commercial vehicle segment.
All-new 4th generation Isuzu D-MAX launched in April would have contributed to growth in pick-up sales.
The growth would have been helped by the introduction of new models like the Isuzu D-MAX during the year. The all-new generation of the popular pick-up truck was launched in April and Isuzu Malaysia reported that average monthly orders were 100% higher than the previous generation.
The bigger commercial vehicles saw lower sales; bus sales, for example, fell by almost 50% between 2020 and 2021 although this would be understandable in view of the situation. With restrictions on interstate travel for much of last year and borders with Thailand and Singapore pretty much closed, tour companies would not have wanted to get new vehicles. However, truck sales did go up by 5.3%, probably in view of increasing demand for delivery services.
Although the factories were forced to shut down for an extended period, the drop in local production was actually minimal – 3,535 units or 0.7%, compared to 15% in 2020 when the drop from 2019 was almost 87,000 units. While passenger vehicle production declined by 11,324 units (2.5%), commercial vehicle production actually rose by 7,789 units (28.4%). Outputs rose for trucks and panel vans which, as mentioned earlier, had greater demand.
Looking ahead in 2022
Notwithstanding pandemic-related issues that can cause disruptions and supply chain issues such the global shortage of semiconductor chips, rising cost of freight, there are still some positive aspects that can boost new vehicle sales in 2022.
Continuation of the sales tax exemption for imported and locally assembled passenger vehicles till June 30, 2022 will be helpful in encouraging people to buy new vehicles. Bank Negara Malaysia’s decision at its Monetary Policy Committee (MPC) meeting in November 2021 to maintain the benchmark Overnight Policy Rate at 1.75% will provide additional policy stimulus to accelerate the pace of economic recovery. This may help to stimulate domestic spending including for high-cost items like motor vehicles, and with the economic recovery will come more consumer spending.
Therefore, the MAA is optimistic that the industry will accelerate its recovery in 2022 and is forecasting growth of 17.9% over the 2021 TIV. This would take the volume to the elusive 600,000 units that has been difficult to reach (the last time was in 2019 when the TIV was 604,281 units). The MAA expects the passenger car segment to grow by 19.3% and account for 540,000 units, with the commercial vehicle segment (which includes pick-up trucks) growing by 6.7% to 60,000 units.
Looking further ahead, the MAA expects 2023 to be a boom year as recovery continues with rising demand after 2022. It forecasts a 7.5% increase to 645,000 units then but then the market will slow down again with average growth of around 2% annually up to 2026. Of course, much depends on how the pandemic runs its course although the government has made it clear that there will not be lockdowns again (apart from targeted ones, if really necessary).
All data from monthly reports of Malaysian Automotive Association.
The Total Industry Volume (TIV) for November was 58,742 units, a drop of 7.5% from October and 4% less than what was recorded in November 2020.
This decrease was attributed to reduced supplies of certain models due to the global shortage of microchips (as well as some parts), and some members of the Malaysian Automotive Association (MAA) also believe that customers may have deferred plans to purchase their new vehicles after learning that the sales tax exemption would be extended till June 30, 2022.
Although there are production delays at some plants due to shortage of parts, the total output in November of 58,0-79 units was 6% higher than for the same month in 2020.
The cumulative TIV over 11 months reached 441,136 units – 4% below the volume achieved for the same period in 2020. This means that the industry would have to deliver 58,864 vehicles in December to hit the forecast of 500,000 units. While the MAA is optimistic that there will be a higher TIV in December, it is hard to predict just how much higher due to the supply issue. Typically, there is a significant jump at the end of the year with promotions and a final push by companies to get the best numbers before they close the year’s books. In 2020, the TIV went from 56,489 units in November to 64,836 units.
