Malaysia: Lower vehicle sales in August

PETALING JAYA: Total vehicle sales in August dropped 22% to 51,148 units from 65,550 units in the previous corresponding period, due to the higher base last year as vehicles received a boost in sales from the one-off tax holiday.

In a statement yesterday, the Malaysian Automotive Association (MAA) said year-on-year passenger car sales dropped 16% to 46,802 units, while the number of commercial vehicles plunged more than 50% to 4,346 units last month.

Year-to-date August vehicles stood at 398,335 units compared with 423,615 units in the previous corresponding period.

On the outlook for September, the MAA expects vehicle sales to be at the same level as August.

This, it said, is due to the shorter working month as a result of the many public holidays in September.

An analyst from a local bank-backed brokerage said the vehicle sales figures in August were within expectations.

“The lower numbers are within forecasts due to the higher base from the tax holiday last year. During that period, even people that had no plans to buy cars, went out and got them anyway, to take advantage of the lower vehicle prices.”

Last year, following its election win, the Pakatan Harapan government announced a three-month “tax holiday” period from June 1 to Aug 31, with the goods and services tax being zero-rated during the period.

In a recent report, AmInvestment Bank Research said the national marques’ (Proton’s and Perodua’s) sales volume will continue to be the key driver of the local automotive space.

“With the recent launch of the Saga, we are confident that Proton will be able to maintain its sales volume momentum through the remaining months of the year while Perodua will continue to assert its dominance as it protracts its position as the leader of market share in the local automotive space.”

The MAA has maintained its 600,000 units total industry volume (TIV) forecast for this year, in light of the economic uncertainties that are expected to remain for the rest of the year.

MAA president Datuk Aishah Ahmad, in July, said consumers and businesses were expected to remain cautious going into the second half of the year, adding that this would only spur aggressive promotional campaigns by local car companies. Most analysts are also maintaining their TIV forecast for 2019.

Kenanga Research in a recent report also said it is maintaining its TIV forecast of 600,000 units for 2019.

“We believe the absence of one-off 2018 tax holiday will be offset by exciting new launches in 2019 and we have factored in a possible delay in new launches’ timing given the backlog of pricing approvals from the authorities and tepid purchasing power.”