Source: Monthly reports of Malaysia Automotive Association
A year ago, new vehicle deliveries stopped as the first Movement Control Order (MCO) was in force although 141 vehicles still reached their customers. A year later, although the MCO is still in force in varying degrees, sales and deliveries continue and in April 2021, the Total Industry Volume (TIV) was the third highest in 12 months with 57,912 units registered.
Cumulative sales for the first four months of this year compared to the same period in 2021 were 89% higher,as would be expected with sales in March and April 2020 having been impacted severely and dropping to the lowest level ever.
For some brands, new vehicle supply was also a factor in April sales being 12.3% lower than March due to the global shortage of computer chips used in the many electronic systems in cars today.
On the production side, it was the same thing a year ago as plants were also ordered to stop operations and only 275 units were reported to have been completed in April 2020. This year, 51,390 vehicles were assembled locally during the same month. As mentioned earlier, shortage of computer chips – a crucial item – saw production dropping diminishing.
93% of vehicles assembled locally were passenger vehicles (excluding pickup trucks).
It should be noted that the as Mercedes-Benz Malaysia does not wish to reveal its sales numbers, they are not included in the data above.
Forecast for May
The Malaysian Automotive Association expects the TIV to continue falling, and May registrations are likely to be lower than April. Although the latest MCO allows for businesses and factories to continue operating, stricter controls on public movements may dampen sales.
Besides the effects of the MCO, the Hari Raya festive period would also be a factor in diminished sales volume. Additionally, supplies of vehicles are also likely to remain affected by the chip shortage.
With continued high demand, Proton reports that its total sales volume increased again for the month of April, the third consecutive month of growth. 15,017 units (including exports) were delivered, and the company’s cumulative volume after the first 4 months of 2021 reached 47,843 units. This is more than double the number for the same period last year although it has to be remembered that the MCO (Movement Control Order) shut down business activities for the whole industry for a while.
By its own estimate, Proton’s latest figure means it has a market share of 26.7% for April, and it continues to strengthen its hold in second position in overall the sales rankings table with a market share to date estimated at 24.4%.
Proton Saga at the top
The company believes its Saga is at the top of the national sales chart with 5,472 units sold in April while its two SUV models continue to set strong sales numbers. The X50, which has a long waiting list, set yet another new high for deliveries with 3,583 customers receiving their vehicles in April. The X70 was dominant in the C-segment SUV category with 2,101 units delivered.
Proton’s other 3 models also performed well and had their best months of 2021. Despite strong competition in the B-segment sedan market, 2,266 units of the Persona were sold, while the Exora continued to rule the C-segment MPV class. Iriz sales received a boost from strong demand for the R3 Limited Edition model that allowed it to have its best sales month since 2019.
Iriz R3 Limited Edition
Good month for the industry
“April was a good month for the automotive industry and aside from Proton, several other brands also had their best month of the year so far. The Total Industry Volume is estimated to be over 56,000 units as all brands are trying to fulfil sales orders before the expiry of the PENJANA sales tax exemption at the end of June 2021,” said Roslan Abdullah, CEO of Proton Edar, the company’s sales arm.
“For Proton, we are continuing with efforts to meet the strong demand for our products while maintaining a high level of product quality. At the same time, we are focussing on improving customer service and addressing issues related to spare parts availability, which is vital as our sales volume increases. We expect the situation will see significant improvement as the year progresses but we are working hard to move up that timeline,” he said.
He added that Proton Edar is looking forward to increased production volumes with the new stamping plant, which is now under construction. “The benefits of improved production volumes, lower costs and increased quality will allow us to increase sales exponentially both domestically and abroad, which will drive the company towards achieving its stated long-term goals,” he said.
After a slow start to the new year, new vehicle sales jumped 30% in February as the buying mood returned, pushing the Total Industry Volume (TIV) to 42,784 units. Of this number, 4,861 units were commercial vehicles )including pick-up trucks). The segment volume was 30% higher than last year, possibly because a year ago, concerns about the pandemic were growing and businesses would have suspended purchases as a precaution.
The higher TIV was also attributed to the easing of the Movement Control Order in some states, making it possible for customers to go to showrooms if they wished. However, many companies have made a big push towards online marketing and have many processes which replace traditional practices where the customers had to personally come to the showroom.
Launch of the Iriz R3 Limited Edition (pictured) and Saga R3 Limited Edition, as well as Special Editions of the Persona and Exora generated excitement in the market in February.
The backlog of orders for some models also contributed to the increase in new vehicles registered in February. Late last year, sales were brisk and popular models were in short supply and just as when there was the GST-free period some years back, the plants could not ramp up production quickly to meet the sudden rise in demand.
The response from the production side seems to have gained momentum as February output of 45,199 vehicles was a 14% increase compared to January output. And compared to the same month in 2020, the output this year was 12% higher, with commercial vehicles registering a jump of 57%.
For the month of March, it is likely that the TIV will still be climbing, especially if the pandemic situation keeps diminishing in severity and public confidence becomes stronger. March is also the final month for some companies to make the final push to get the best business results for their financial year which ends on March 31.
The appeal of new models being launched will also bring more sales to companies like Perodua which began deliveries of its new Ativa SUV in early March. At the time of writing, we are aware of a couple of other models that will be launched this month too so there should be higher consumer interest which will continue up to the Hari Raya festive period.
Source: Monthly sales reports compiled by the Malaysian Automotive Association (MAA). The Total Industry Volumes shown for the month may be incomplete as some companies are unwilling to provide their sales data.
♦ New vehicle sales in the first month of the year were 32,829 units, 51% lower than for December 2020, and 24% lower than the same month in 2020.
♦ The decline was due to a few factors, among them the surge in purchases in December by those who did not want to miss out on the sales tax exemption. It was originally set to expire on December 31, 2020 but at the last moment, the government decided to allow an extension until June 30, 2021.
♦ The large number of sales in December would have exhausted the order bank for the following month on the one hand, and companies also ran low on stocks due to the high demand at the end of the year. For a change, some customers did not choose to defer their delivery date to the new year.
♦ Difficulties in deliveries due to dealers being unable to get stocks also kept the Total Industry Volume (TIV) down. The disruption caused by the ongoing MCO affected some suppliers of parts or systems and without just one item, a car cannot be completed at the assembly plant.
♦ January sales were also impacted by the restrictions of the MCO which limited travel distance to 10 kms from home. However, many companies have established and publicised their ‘online showrooms’ which can at least enable buyers to start the purchase process. Some companies also offer to bring vehicle over for test-drives and even deliver newly registered vehicles to the doorstep using a dedicated transport service.
♦ Sales of new commercial vehicles were higher in January 2021 compared to a year earlier. Almost 4,000 vehicles (including pick-up trucks) were delivered whereas, in January 2020, 3,532 units were delivered.
♦ The MAA expects February sales to be even lower, given the short month and the ongoing MCO which affects businesses in various ways.
The Total Industry Volume (TIV) for 2020 was expected to be lower than the 604,281 units recorded in 2019 and in the first half of the year, many would have expected it to be significantly lower. However, with the consistently high numbers in the second half of the year, the TIV closed at 529,434 units, 12% lower than 2019 but well past the forecast of 470,000 made by the Malaysian Automotive Association (MAA).
When the year had started, the MAA had actually forecast 607,000 units for the year, but revised it substantially downwards by 23% as the seriousness of the pandemic and its impact on the industry became clear. The nationwide shutdown naturally resulted in lost sales, with April seeing the most dramatic drop to virtually zero as no business could be conducted.
Proton sales rose in 2020 and its overall market share went above 20% for the first time since 2013.
When the commercial sector was progressively allowed to resume, there was some consumer hesitance but then the government came out with its PENJANA program to help the economy recover and for the auto industry, the help was in the form of sales tax exemption for 6 months (extended a further 6 months until June 2021). This would lower retail prices and Malaysians always love it when they can escape paying tax, of course. The exemption applied to both locally-assembled and CBU models, except that the exemption for the latter was half and not the full 10%. Still, it made a difference, especially for the expensive models that are mostly CBU anyway.
Proton sales increased
It was expected that the sales volumes would be lower in 2020 but Proton didn’t suffer such a decline. The carmaker already had a healthy order bank and during the year, total vehicle deliveries were 8,524 units higher than in 2019, finishing off at 108,524 units. The volume was an increase of 8.8% over the 100,821 units sold in 2019.
Perodua, in spite of a big backlog of orders, still saw a reduction in volume of 20,178 units, 8.4% lower than the 240,341 units delivered in 2019. But it still retained the No. 1 position which it has had since 2006.
Among the non-national brands, Honda was in the lead but sold almost 25,000 fewer vehicles. Next was Toyota which sold 58,501 vehicles, while Nissan reported 14,160 vehicles. For the rest of the brands, the reduction in sales volume amounted to 20,451 units.
Malaysian makes gain in market share
In terms of market share, both Malaysian makes gained at the expense of the main rivals. Reflecting its higher sales, Proton’s share rose to 20.5%, an increase of 3.9%. The last time the carmaker had a share of 20% or more was in 2013 and the years before. Perodua, in spite of less deliveries, saw a 1.8% increase in its share to just above 41%. In most years, its share has been around 30%+.
Optimistic forecast for 2021
For 2021, the MAA is forecasting 570,000 units – an increase of 100,000 units from its 2020 forecast, which is 8% higher than the actual TIV achieved. Strong growth (18%) is expected in the commercial vehicle segment which will continue to require vehicles for the various projects underway around the country. If the pandemic doesn’t worsen, the association and its members expect the high demand to continue into 2022 before settling down to a 3% rate of increase annually.
To know more about promotions at BHPetrol stations, visit www.bhpetrol.com.my.
The severity of the COVID-19 pandemic forced governments to put their countries into lockdown, which meant that industries and businesses had to close. Malaysia didn’t escape the economic downturn that resulted, though good management at the start helped to bring the numbers down and the situation under control. This allowed the country’s economic sector to restart and slowly recover, aided by a recovery program which covered many sectors.
For the Malaysia auto industry in modern times, 2020 was the worst year in its history which goes back to the 1960s when the first local assembly of vehicles began. There had been a few recessions but even though they were challenging with a contraction of the market, there wasn’t a total shutdown as was experienced last year. Activities could still continue and each company had its own strategy to weather the downturn, which veterans knew would pass. And while there was loss of jobs, there wasn’t the fear of death or sickness too.
PENJANA was a big help
The PENJANA program by the government to help the economy recover began in the middle of the year and for the auto industry, the support given was in the form of exemption of the 10% sales tax, reducing the price at point of purchase. It was a straightforward incentive – 100% of the tax for models assembled locally (CKD), 50% for those imported CBU (completed built up).
The incentive worked well as sales quickly rose and stayed above 50,000 units a month during the second half of the year. In fact, the final quarter was exceptionally strong, averaging 61,373 units a month compared to 53,765 units a month for the quarter before.
All data and charts provided by Malaysian Automotive Association.
Consistently high numbers in second half
Nevertheless, the Total Industry Volume (TIV) for 2020 was expected to be lower than the 604,281 units recorded in 2019 and in the first half of the year, many would have expected it to be significantly lower. However, with the consistently high numbers in the second half of the year, the TIV closed at 529,434 units, 12% lower than 2019 but well past the forecast of 470,000 made by the Malaysian Automotive Association (MAA).
However, when the year had started, the MAA had actually forecast 607,000 units for the year, but revised it substantially downwards by 23% as the seriousness of the pandemic and its impact on the industry became clear.
The monthly TIV reached its peak in December 2020 when a total of 68,836 units were registered. The exceptional high TIV in December 2020 was due to consumers buying forward in anticipation that the tax exemption incentive (only for passenger vehicles) expiring on December 31, 2020, as original announced. However, it has been extended to June 30,2021.
“MAA would like to express our heartfelt and sincere appreciations to the government in general and the Ministry of Finance and Ministry of International Trade & Industry in particular for listening to the industry’s plights and providing us with all the supports (especially the PENJANA package incentive) to ensure the continuance of business activities and the survival of the industry,” said Datuk Aishah Ahmad, President of the MAA.
By segment, passenger vehicles (excluding pick-ups) declined by 12.6%, which was higher than for commercial vehicles (including pick-ups) which declined by 10.4% Production of new vehicles in 2020 seemed to be impacted by the forced shutdown of every factory in the country for about 2 months but when allowed to resume operations, the carmakers worked harder to meet not only outstanding orders (for high-volume brands like Perodua and Proton) but also increasing demand in the second half of the year. By year-end, the production volume was 15% lower than the output in 2019.
Total Production Volumes in 2020 and 2019.
Looking ahead
As always, the MAA takes feedback from its members and also factors in economic and environmental situations when looking ahead. It is optimistic that 2021 will see the local economy recovering in tandem with the global economy, which can boost sales. Certainly, the continuation of the sales tax exemption will help, along with more consumer confidence to spend on items like new vehicles.
Lower hire purchase (H-P) interest rates will also help, complemented by the introduction of new models which the companies will be offering at prices that will be ‘in tune’ with the times. While the industry may have come to a standstill in one sense, activities continued behind the scenes and whatever projects were underway would have only been slightly delayed.
So, for 2021, the MAA is forecasting an increase of 100,000 units from its 2020 forecast, which is 8% higher than the actual TIV achieved. Strong growth (18%) is expected in the commercial vehicle segment which will continue to require vehicles for the various projects underway around the country.
Looking further ahead, it appears that the MAA expects the strong demand to continue into 2022 with an increase of 6% to take the TIV past 600,000 units again. Thereafter, from 2023 – 2025, growth will be at a slower rate of 3% to 3.2% annually. Hopefully, the pandemic will have diminished significantly and normalcy has returned.
Source: Monthly reports of Malaysian Automotive Association (MAA)
♦ The upward trend seems to have flattened out with October’s Total Industry Volume (TIV) less than 1% higher (226 units) than the TIV for September. No doubt, the reduction in the cost of buying a new vehicle due to the government’s Sales Tax exemption incentive still helps encourage sales and when compared to the same month in 2019, this year was 5.2% better.
♦ The TIV for the period from January to October has almost reached 400,000 units, reached 398,159 units to be exact. With two months remaining to hit the MAA’s 470,000-unit forecast for 2020, can the monthly TIV for November and December average 36,000 units? Since July, it has been above 50,000 units.
♦ Of the 56,670 units registered, 86% were passenger vehicles (excluding pick-up trucks).
♦ The output from the plants rose more substantially to 58,631 units in October to meet the higher demand and to also build up stocks for the end of the year period. It is likely that December will see a rush to take delivery so as to enjoy the sales tax exemption, This would be unusual as many customers often want to defer to the new year.
♦ One thing that could dampen sales a bit would be the uncertainty surrounding the COVID-19 pandemic. While the government is reluctant to impose a full-scale MCO like what we had in March and April when businesses had to shut down completely, there may be areas where stricter conditions are imposed, especially in the Klang Valley where there is the largest number of vehicles sales.
♦ The MAA does expect some softening of the market in the light of a broader impostion of the CMCO and says that members have reported a slowdown in showroom traffic. Nevertheless, many companies now have online facilities for customers to know more about products and then make bookings as well, so at least the initial phase of transactions has been addressed in the ‘new normal’.
Source: Monthly reports of Malaysian Automotive Association (MAA)
With the government providing the incentive of exempting sales tax (10% for locally-assembled models, 5% for CBU models), it seems that there is strong interest in buying new cars despite the gloomy situation we are experiencing.
Companies selling new as well as used cars are reporting strong sales and for Proton, the volume in October was reported to be 11,392 units (including exports), which it estimates to be a 21.3% share of the market’s Total Industry Volume (TIV).
The volume was a 20% increase over the same month in 2019 although it was 4.6% lower than September’s. However, according to Proton, three of its models were leaders in their respective market segment – in the B-segment with the Persona (2,360 units); SUV segment with the X70 (2,216 units); and the Exora which retains its customary position as the best-selling C-segment MPV.
The Exora remains the most popular model in its segment despite being around for many years now.
Strong H2 performance overall
“The recovery of Malaysia’s automotive market is continuing to gather pace judging by the number of new model launches and total sales in October. We estimate the Total Industry Volume to be the second highest in 2020 with over 57,000 units sold, proof that the car industry is rebounding strongly,” said Roslan Abdullah, CEO of Proton Edar, adding that the numbers could have been better for Proton.
“Looking at the numbers, we noticed a significant drop in East Malaysia sales while the Central region was static compared to September. Part of this was due to the implementation of the Conditional Movement Control Order (CMCO) to limit the movement of people, thus affecting retailers. But there was also a sense of customers holding back before the launch of our newest model, the Proton X50. Regardless, PROTON is confident of ending the year well and using the results as a base to aim even higher in 2021,” he explained.
The X50 has made a strong impact on the market which has responded with over 27,400 bookings to date.
Bookings for Proton X50
The long-awaited X50 SUV was officially launched towards the end of October and over 27,400 bookings have already been received nationwide. The first 447 units have already been delivered to customers and further deliveries are ongoing.
We are pushing to ensure fulfilment over the last three months of 2020, while continuing to emphasise product quality,” Encik Roslan assured.
Source: Monthly reports of Malaysian Automotive Association
♦ The government’s Sales Tax exemption incentive continued to encourage many to buy new vehicles in September, pushing the Total Industry Volume past 56,000 units. In fact, it was 26% higher than the same month in 2019.
♦ Of the 56,444 units registered, 9.7% were commercial vehicles which includes pick-up trucks.
♦ Cumulative sales after 9 months have reached 341,489 units, To achieve the MAA’s 470,000-unit forecast for 2020, the industry must sell an average of 42,837 units in the remaining 3 months. Since July, the monthly sales have been over 50,000 units so the question will be whether this level can be sustained until the end of the year?
♦ Production rose slightly as most plants assembled as many units as possible to meet the higher demand. The output rose of 51,987 units was 15% higher than the same month in 2019, but output of commercial vehicles was lower by 26%.
♦ October numbers could be lower as the burden of making monthly instalments has resumed with the cessation of the loan moratorium that was provided by the banks as a form of assistance during this pandemic period. Furthermore, the imposition of the CMCO for two weeks in the month (if not longer) in the region with the most new vehicle sales may have an effect too. However, unlike the situation in March when all car companies had to suspend all activities, businesses can presently continue operating and relevant government agencies also process new vehicle registrations.
Source: Monthly reports of Malaysian Automotive Association
When automotive historians look back on 2020, it will be regarded as a dark period for the industry. Factories had to shut down for long periods, along with showrooms, and sales came to a standstill for a couple of months. It was an unprecedented situation; even during the worst recessions, business still continued.
However, it appears that the industry is recovering steadily and where the Malaysian market is concerned, the Total Industry Volume of new vehicles sold exceeded 50,000 units for the second month in a row. That’s partly due to the government exempting sales tax, which lowers the retail price, but there would also have been people who had to defer their purchases in March and April.
Market share estimated at 21.7%
For Proton, things have been going well with yet another great month – its second best – in August. During the month, 11,378 units were sold, an improvement of 24.7% over the same month in 2019. With this volume, the brand’s market share for the month is forecast at 21.6% while its year-to-date market share is estimated to be 21.7%.
With 61,672 sales so far in 2020, Proton‘s cumulative sales volume after 8 months is 46 units ahead of the same period from the previous year. The achievement is particularly noteworthy as sales in March, April and May were affected by the Movement Control Order (MCO).
The company also states that three of its models were sales leaders in their respective segments although we wonder how they determine that when the official data for individual model sales of other brands is not released. In any case, the powerful Competition Commission makes it an offence to share such information. This was declared some years back with the Competition Commissioner saying that if such data is shared by the industry, ‘the prices of spare parts will go up’. As a result, the Malaysian Automotive Association stopped releasing model sales data and the data can only be made public 12 months later.
“Proton is pleasantly surprised by how quickly we have been able to recover the lost sales during the MCO period, as it only took us three months to get back on track. By exceeding our YTD volume in August 2019, we are quietly confident of recovery from the headwinds of COVID-19. The positive effect this has on the company, our employees and the vendor community cannot be understated and we hope to continue this trend until the end of the year so as to give the automotive industry ecosystem a strong boost,” said Roslan Abdullah, CEO of Proton Edar.
