EconomicsLocal NewsNews

Automotive: Going full throttle on the final lap

The sluggish performance of the automotive sector for the better part of this year due to market uncertainties brought on by the COVID-19 risk and enforcement of the Movement Control Order (MCO) finally revved up to full throttle in the final quarter (Q4) of 2021.

Car factories and original equipment manufacturers (OEMs) ramped up production and deliveries of vehicles to fulfil backlog and new orders as showrooms gradually resume operations after the nationwide lockdown was lifted in August.

The first full month of restored market conditions after MCO was a productive one for both national car makers and several OEMs as the local automotive ecosystem, production, and exports gathered momentum.

Delivery of Perusahaan Otomobil Kedua Sdn Bhd’s (Perodua) vehicles grew by 102 per cent month-on-month (m-o-m) to 14,160 units in September from 6,988 units in August as the supply situation gradually improved, while Proton Holdings Bhd (Proton) garnered 10,380 unit  sales to retain its hold of second place in Malaysia’s automotive sales table.

 

Good Showing by National Car Makers

 

Perodua broke new monthly sales and its own production records with registration of 27,858 vehicles in October, while Proton sold 13,362 units.

The highest sales month in Perodua’s history came with improved production and swift deliveries of vehicles to customers as the car manufacturer aimed to deliver as many vehicles as it could in Q4 2021.

UMW Toyota Motor which ranked third in Malaysia’s automotive sales table, also experienced sales recovery following the easing of the Full MCO (FMCO) restrictions with sales of 8,500 units registered in October, a 5.8 per cent increase from the 8,033 units sold in September.

Based on total new vehicle sales breakdown by brand data up to October 2021 by the Malaysian Automotive Association (MAA) and CGS-CIMB Research, Perodua led the list with a 38.4 per cent market share, followed by Proton (22 per cent), Toyota (14.1 per cent), Honda (9.8 per cent), Nissan (2.4 per cent), Mazda (2.1 per cent), Isuzu (1.9 per cent), and BMW (1.2 per cent).

For November, Perodua registered 20,299 sales (-27.1 per cent m-o-m) as intermittent disruption from COVID-19 cases and semiconductor chip shortages reportedly impacted its production.

The compact car maker, however, is aiming for its highest ever monthly registration in history for December with at least 30,000 units registration as it targets to end the year with over 200,000 units sold.

 

Overcoming Challenges Plaguing Industry

 

Perodua president and chief executive officer (CEO) Datuk Zainal Abidin Ahmad said: “We are working with the automotive ecosystem to overcome issues such as rising COVID-19 cases as well as the shortage of semiconductor chip supply. With these countermeasures in place, we see December 2021 as our best month yet.”

Meanwhile, Proton’s overall sales of 14,187 units (both domestic and export) in November pushed its year-to-date numbers to 100,566 units, raising expectations the company will be able to wrap up the year with positive sales growth.

“Crossing over the 100,000-unit threshold with a month to go is a highpoint for us after another year disrupted by COVID-19. We are humbled by this achievement and are now confident of ending the year with an increase in total sales,” Proton Edar Sdn Bhd CEO Roslan Abdullah was reportedly quoted as saying recently.

Overall, 2021 has been a challenging year for the automotive sector, not only for the manufacturers but also for the consumers.

For the better part of the year, there were fewer vehicles on the roads and highways due to travel limitations, capacity restrictions in place, and tighter conditions for interstate travel aside from the emergency, while businesses grounded to a halt for many months during the first round of MCO period, reimposition of MCO and country-wide lockdowns in response to the spike in COVID-19 cases.

 

New Launches Muted by Pandemic

 

While consumer demand improved alongside easing of COVID restrictions in Q3, manufacturers were faced with pandemic-related disruption challenges and supply chain issues, exacerbated by the shortage of semiconductors chips which is a global phenomenon affecting multiple sectors, hitting both production and sales.

The year 2021 also saw limited new launches and model updates or facelifts.

Among notable events in 2021 were the launch of Perodua Ativa, Hyundai Staria, Hyundai Kona Electric, Toyota Corolla Cross, BMW iX, Volkswagen Arteon facelift, Proton Pesona and Iriz facelifts, Perodua Myvi facelift, and the all-new Honda City Hatchback.

Moving forward to next year, the Government through Budget 2022 extended the current Sales and Services Tax (SST) exemption for new vehicles under the National Economic Recovery Plan (PENJANA) until June 30, 2022.

The PENJANA scheme offers a 100 per cent sales tax exemption for passenger vehicles, sports utility vehicles (SUVs) and completely knocked down (CKD) multi-purpose vehicles (MPVs), as well as a 50 per cent sales tax exemption for completely built up (CBU) passenger vehicles, SUVs and MPVs.

Bank Negara Malaysia, meanwhile, at its Monetary Policy Committee’s (MPC) final 2021 meeting on Nov 3, maintained the overnight policy rate (OPR) at 1.75 per cent after taking into account Malaysia’s economic growth outlook amid lingering COVID-19 pandemic concerns.

The Malaysian automotive sector’s total industry volume (TIV), which hovered circa 500,000 units per annum, is expected to be buoyed next year by the low-interest-rate environment, coupled with the extended PENJANA’s tax holiday and favourable government policies to revive domestic demand.

 

Boosting Electric Vehicles Take-up Towards Low-carbon Objectives

 

The Government, via Budget 2022, aimed to boost the electric vehicles (EV) sector with full exemption of import duties, excise duties and sales tax starting next year.

A 100 per cent road tax exemption will be given to EV buyers as well as income income relief for individuals of up to RM2,500 on the cost of purchase, installation, rent, hire purchase, as well as subscription fees for EV charging facilities.

The incentives also include 100 per cent duty exemption for CBU EVs up to Dec 31, 2023, and 100 per cent duty exemption for CKD EVs up to Dec 31, 2025.

All these, in progression with the national aspiration of low-carbon mobility objectives and green mobility agenda as spelt out in the 12th Malaysia Plan (12MP), is set to catalyse demand and electrify the industry shift towards the EVs segment, and accelerate Malaysia’s journey towards being a carbon neutral country by 2050.

What's your reaction?

Excited
0
Happy
0
In Love
0
Not Sure
0
Silly
0

You may also like

Comments are closed.

More in:Economics

Economics

TPB 2030

Kerajaan amat menitikberatkan pencapaian keseimbangan dan kesaksamaan di kalangan rakyat ⁣ Status sosioekonomi Bumiputera masih ...