new vehicle production Archives

New vehicle sales in July fell 23%, as expected

As expected, sales in July 2022 fell and the Total Industry Volume (TIV) dropped 23% to 48,922 units. The reason was partly due to June being exceptionally high as many people rushed to buy their new vehicles before the sales tax exemption ended. Whatever stocks companies had were quickly exhausted during the month and the TIV might have been higher if there had been more supply.

For those who managed to confirm their bookings by the last day of June 2022, the sales tax exemption will still apply for their new vehicle, provided it is registered not later than March 31, 2023. That should be ample time for the assembly plants to supply the vehicles.

Looking back at 2021, the TIV this year is certainly higher. In July last year, due to the MCO and restrictions, sales fell to less than 7,500 units for the month. On a cumulative basis, the TIV has reached 380,595 units after 7 months, 48% higher than the volume for the same period in 2021.

On the production side, from January to July this year, 369,994 vehicles were assembled locally, almost 126,000 units (52%) more than for the same period last year. However, the chip and parts shortages continue to slow down output as vehicles cannot be completed. This affects both locally assembled as well as imported models since the chip shortage is global.

The Malaysian Automotive Association expects August sales to be at the same level as July. The association revised its annual forecast upwards by 30,000 units to 630,000 units. This means that average monthly sales will have to be about 50,000 units in the remaining 5 months.

The situation at the moment is not a true picture of the state of the market as the number of registered vehicles reported to the MAA is largely dependent on whatever stocks are available from the plants or from overseas. Until the supply situation stabilizes, it will be hard to ascertain the demand since every available unit is delivered as soon as it arrives at the showroom.

New vehicle sales increase by 33% in 2022

While 2021 was a difficult year for the car companies, 2022 has seen significant increase in volumes in spite of the ongoing supply shortage of certain parts, limiting output from the plants. According to the Malaysian Automotive Association, which has been compiling industry data since 1967, the Total Industry Volume (TIV) in the first six months of 2022 was 331,386 units, an increase of 82,208 units or 33%.

This big increase is attributed to the pent-up demand for new vehicles but it has also to be noted that the TIV for the same period in 2021 was low due to the restrictions of the Movement Control Order (FMCO) in June 2021. As can be seen in the chart, the strict restrictions saw a sharp drop in sales.

Total Industry Volumes – 2022 vs 2021. All charts provided by Malaysian Automotive Association.

Following the government’s decision of not extending sales tax exemption incentive for passenger vehicles (under the PEMERKASA+ package) after June 30, 2022, bookings surged as those who wanted to beat the deadline rushed to place bookings for new vehicles. Although they would not get their vehicles before the deadline, the government has allowed the exemption to be allowed provided the new vehicles are registered by March 31, 2023.

TIV (Total Industry Volume) of new vehicles by month.

This pushed the June TIV to 63,366 units, an exceptionally high volume as companies rushed whatever stocks they had to customers. The figure could have been higher, had there not bee the shortage of vehicles due to the shortages of chips and components which affected certain makes.

The top 5 brands
The top 5 brands retained their 2021 ranks, with Perodua still leading. While volumes rose, the markets shares of Perodua and Proton decreased, but the market shares of the non-national makes rose.

Higher output from factories
Total production volume in the first half of 2022 also increased likewise by 31.8% to reach a total of 317,933 units compared to 241,288 units in the same period last year. The much higher total production volume seen this year was because there was a total lockdown enforced by the government in June 2021 which shut down factory operations. In addition, the higher output was also in response to the high demand.

Production volumes for first half of 2022 and 2021.

Forecast revised upwards
For the whole of 2022, the MAA has raised its forecast to 630,000 units in view of the strong and positive market trend. This is 30,000 units more than the original forecast announced at the beginning of the year. This means that during the second half of the year, monthly saves will have to be at least 49,760 units.

Revised forecast for 2022. *: Original forecast was announced in January 2022.

In revising its forecast, the MAA has taken various economic and environmental factors into account as well as drawn on input from its members. The association expects the country’s economic recovery to maintain its momentum and the Finance Ministry is maintaining its official GDP forecast of 5.3% to 6.3% for 2022.

However, there are still some factors that can slow the economic growth, such as geopolitical tensions, escalating oil prices, inflationary concerns, and increases in food prices. These may also make consumers hesitate in making purchases, while business in the auto industry may faced increased logistics and shipping costs and experience supply chain disruptions. Bank Negara Malaysia’s recent decision to increase the Overnight Policy Rate (OPR) by 25 basis points to 2.25% may also dampen consumer confidence.

Looking ahead till 2026…. assuming that there are no major disruptions in Malaysia or globally.

Sales figures in other ASEAN markets from January to May 2022. The data for electric vehicles is based on officially reported numbers by members of the respective automotive associations in each country.

143% increase in Isuzu D-MAX sales in first half of 2022

23% drop in new vehicle deliveries in April

While March saw a big surge in new vehicle sales to take the Total Industry Volume (TIV) past the 70,000-unit level, April’s TIV fell by 23% to 56,213 units of passenger and commercial vehicles.

The decline was attributed by the Malaysian Automotive Association (MAA) to the following reasons – 1) the ongoing global shortage of microchips as well as certain components and logistics delays, and 2) companies with their financial year ending in March put in maximum effort to close with the highest volume.

While the TIV for April 2021 was 4% higher, the cumulative volume after the first 4 months of this year is 8% higher, with 215,965 vehicles sold. This is made up of 140,905 units of passenger vehicles (excluding pick-up trucks) and 25,560 of commercial vehicles (including pick-up trucks).

Local production has, likewise, also been higher in the first 4 months of 2022, compared to the same period in 2021. The combined output from all the assembly plants was 208.894 units, 10,418 units more than in 2021.

The output in April was also higher this year, with 54,734 units produced, compared to 51,390 units in the same month last year.

Although May is a short working month due to the long holidays during the Hari Raya Aidilfitri period, the MAA expects that the TIV can be as high as April’s. Many companies still have a backlog of orders to fulfill and even if the market takes a ‘breather’, the numbers can still be high. Nevertheless, how many units that can actually deliver will depend on how many vehicles can be completed given the shortage of microchips.

March new vehicle sales rocket past 70,000-unit level

*Data source: Monthly sales reports compiled by Malaysian Automotive Association.*

With output from the plants increasing, deliveries in March rose by 62.5% from February to pass the 70,000-unit mark which is one of the highest (if not the highest) in the industry’s history.

Apart from having more stocks, some of the companies with financial years ending on March 31 also put in their final effort to close with the highest possible numbers. Additionally, March also had many business days to sell cars although for many customers, there would still be a lengthy wait, especially for the more popular models.

With the Finance Minister having indicated that the exemption for sales tax won’t be extended again, there is also a rush by customers to get their new vehicles and save money. Again, due to the large number of orders and backlog, some companies are already warning customers that they might not be able to enjoy that saving as their vehicle might not be available before the end of June when the exemption period ends.

Compared to the same month the year before, the Total Industry Volume (TIV) for March 2022 was also notably higher by 13%.

The global shortage of microchips continues to affect carmakers locally as well as in other countries. Members of the Malaysian Automotive Association (MAA) expect that output will still be disrupted and imported vehicles may not be coming in large numbers.

This is likely to cause April’s TIV to fall in spite of festive promotions for the coming Hari Raya Aidilfitri. The big push in March may also diminish orders although many companies still have a backlog of orders to fulfill.

February 2022 New Vehicle Sales, by Brand

Data for BMW and MINI is only provided by BMW Group Malaysia every three months. Data for Kia, Peugeot and Volkswagen not available at this time. Data for Mercedes-Benz is not available as Mercedes-Benz Malaysia does not wish to reveal their sales data. Source: Malaysian Automotive Association.

February new vehicle sales uncharacteristic with higher Total Industry Volume than January

*Source: Monthly reports of Malaysian Automotive Association.*

Historically, February is a ‘low’ month as it has the least working days of the year and often, there are also major festive periods during the month, further reducing the number of selling days. However, February in 2022 bucks the trend and saw an 8% increase over January sales to close at 43,722 units. Compared to 2021, the Total Industry Volume (TIV) was quite close, with a difference of 274 units.

The surge in sales (or more correctly deliveries) was due to the big backlog of orders being fulfilled as much as possible. The severe floods in December had caused shortages in the supply chain as some parts suppliers had to suspend operations due to their factories being flooded. This resulted in the TIV for January being lower than it should have been and as supplies resumed, the plants quickly rushed to complete vehicles, and send them to dealers.

The resumption of regular production was reflected in the high output of vehicles from plant in February – 51,291 units, which was 13% more than for the same month in 2021. 92% of the output was passenger vehicles. There are still constraints to production due to the global shortage of microchips and the backlog continues as it is beyond control of assemblers and suppliers.

The upward trend is expected to continue through March which has more working days. The companies still have many outstanding orders to fulfill, while new models are being launched every month. March is also the final month of the financial year for some companies, so they will be pushing hard to finish off with their best possible numbers.

As for cumulative TIV, this year looks like it will be a better year if the performance – in spite of shortages – is any indicator. Within just the first two months, the TIV for sales is 10% higher than the same period in 2021, while the TIV for production is 11% higher. Sales of commercial vehicles (including pick-up trucks) is 33% higher, suggesting that companies are confident enough to expand or update their fleets in anticipation of improving business.

Perodua to surge forward in 2022 with RM1.326 billion investment

July new vehicle sales higher but nowhere near normal levels

As expected, new vehicle sales in July 2021 were way down, though not as rock-bottom as June when the Total Industry Volume (TIV) was under 2,000 units. As in June, the continued closure of showrooms meant that no sales could be conducted and even if they could, registering the vehicles would not be possible. However, July’s TIV was 270% or 5,465 units higher as showrooms could operate in Sabah and Sarawak so sales were possible there and accounted for the higher numbers.

Minimal bookings from online channels
According to the Malaysian Automotive Association (MAA), which has been compiling data since the 1960s, members reported that bookings via online channels were minimal. These ‘virtual showrooms’ started to appear over the past year as stricter SOPs were in force and there was also concern that customers might not be comfortable coming to showrooms. Customers can make bookings and make payments via online transfers to at least start the process. However, there are still the other things like loan applications which still need some personal interaction.

The cumulative TIV after 7 months reached 256,215 units this year, which was about 10% higher than for the same period in 2020 – and this has been with 2 months of virtually no sales. With sales resuming from mid-August, there will be a backlog to clear plus new orders so the TIV by year-end might still be higher than for 2020.

3-digit production figures
On the production side, the assembly plants have had to suspend operations too and the output fell to three digits in June but rose again in July. The disruption has been challenging for the plants which very much prefer consistent assembly. The shortage of microchips is also slowing output and as the end of the year nears, pressure will be on to deliver as many vehicles as possible because car companies are using the sales tax exemption as a selling point. It expires at the end of this year so many will want to make sure they can enjoy those savings.

Will sales pick up again?
Looking ahead, the MAA expects August sales to be better although there are only two weeks to the end of the month for sales. Furthermore, given the current situation in the country, not only with the pandemic but also the political situation, consumer sentiment may be cautious, and people will be reluctant to spend a lot.

According to MAA President, Datuk Aishah Ahmad, total losses for the local auto industry for the months of June and July have been estimated to be more than RM14 billion. “This is just only from sales of vehicles in the domestic market. Our members also lost much in terms of revenue from exports of vehicles and components, and sales of spare parts locally. All in all, these losses had been very substantial and unprecedented”, she said.

Car showrooms, accessory stores and carwash centres can resume operations from August 16

New vehicle sales and production summary for August 2020

*Source: Malaysian Automotive Association*

♦ It should be noted that the sales volume shown for August does not indicate the Total Industry Volume (TIV) as some companies have chosen not to share their data on a monthly basis and will only do so on a quarterly basis.

♦ Although the August sales volume was 8% lower than July’s, the government’s Sales Tax exemption incentive continued to help boost sales as the same month in 2019 registered 3% lower sales.

♦ Cumulative sales after 8 months have reached 285,045 units, 28% lower than for the same period in 2019 but a slightly narrower gap compared to the January – July period for both years.

♦ To achieve the MAA’s 470,000-unit forecast for 2020, the industry must sell an average of 46,238 units in the remaining 4 months. The 52,800 units sold in August were therefore above that level but can high volumes be sustained till the end of the year?

♦ Production rose again as the plants could resume normal production capabilities and respond to the increased demand. The output rose by 5.4% to 50,228 units which comprised 47,934 passenger vehicles and 2,294 commercial vehicles. However, the loss of almost 3 months of production has put the cumulative output 31% behind that of 2019 in the same 8-month period.

Source: Malaysian Automotive Association

Sales & Production Summary – July 2020

♦ With the government exempting Sales Tax and car-buyers able to save money, new vehicle purchases have started rising, with July increasing by 29% over the June Total Industry Volume.

♦ The Total Industry Volume (TIV) of 57,552 units comprised 52,119 passenger vehicles, and 5,433 commercial vehicles (including pick-up trucks).

♦ Compared to the same month in 2019, this year’s volume was 13% higher.

♦ However, cumulative sales after 7 months of 232,245 units are 33% lower than for the same period in 2019 which was 347,171 units.

♦ To achieve the MAA’s 470,000-unit forecast for 2020, the industry must sell an average of 47,551 units, or a total of 237,755 units, in the remaining 5 months.

♦ Production also rose as plants shifted into higher gear and compared to the same month in 2019, the total output was only 3% lower. Cumulative production is, however, 36% lower than for the same period last year.

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