New vehicle sales and production pick up again in August

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New vehicle sales and production pick up again in August

*Data source: Monthly reports of Malaysian Automotive Association*

With business operations in most parts of Malaysia allowed to resume after over 2 months of forced closure, new vehicle sales and production started to rise in August. However, the Total Industry Volume (TIV) recorded was only 17,500 units as showrooms began operating only from the middle of the month. The August TIV was less than half of the average monthly sales during the first month of the year.

Compared to the same month in 2020, this year’s August TIV was 35,300 units lower although it was not as bad as in June when the full MCO lockdown began. In that month, the sales volume for the whole industry fell by 42,774 units,

As would be expected, the closure of showrooms has had an impact on the cumulative volume for the year. For the first 8 months of 2021, the TIV reached 273,757 units or 12,504 units (4%) less than for the same period in 2020. This has led the Malaysian Automotive Association (MAA) to reduce its TIV forecast for the year by 70,000 units to 500,000 units. This would be almost 30,000 units lower than the TIV for the whole of 2020.

The lockdown also saw production at factories having to suspend their operations. During the lockdown months, the auto industry used the PIKAS initiative to get its workforce vaccinated in preparation for resumption of operations.

From mid-August onwards, the government permitted factories to resume operations but the number of workers allowed would be dependent on the percentage vaccinated. Those with 80% or more of their workers vaccinated were allowed to operate at 100% capacity.

From January to August, the total output from all the vehicle plants was 258,024 passenger and commercial vehicles. The same period in 2020 recorded 263,876 units or 2% higher.

With four months remaining, the car companies are hoping for the market to pick up as much as possible. To achieve the MAA’s target of 500,000 units by the end of the year means that monthly sales will have to average 56,560 units. This may well be possible if you look at the sales during the last quarter of 2020. However, in 2021, many more people and businesses have been struggling with the prolonged restrictions of movements and spending on expensive items like new cars might not be considered or possible.