Shortage of stocks pushes January new vehicle sales down 38%

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Shortage of stocks pushes January new vehicle sales down 38%

*Data sources: Monthly reports of Malaysian Automotive Association (MAA)*

While 2021 ended on a high note with the highest Total Industry Volume (TIV) of the year, the new year started with a significant drop in new vehicle deliveries due to low stocks as a result of the plants being unable to complete vehicles. This was due to the floods in certain parts of the Klang Valley which has a large concentration of parts suppliers whose factories were flooded, causing supply chain disruptions.

The TIV for January 2022 was 40,581 units, 38% lower than the volume of new vehicles delivered during December 2021 (65,184 units). It was, however, 22% higher than the TIV for January 2021.

Year-end promotions and the ongoing sales tax exemption also saw many buyers taking their vehicles in December, so the spill-over to January was lower than usual.

The companies were also unable to register new electric vehicles for their customers due to a problem at the JPJ which prevented the registration process from being completed as roadtax does not need to be paid from January 1. Presumably, the people who developed the system never expected that one day, the government would exempt certain vehicles from roadtax so no provision was made.

It is only recently that the Transport Minister finally announced that the matter was resolved and EVs can now be registered. The exemption is given until the end of 2025 and applies only to fully electric vehicles (including fuel cell electric vehicles), not hybrids.

As per the announcement during the Budget 2022 presentation last year, all EVs will be exempted from import and excise taxes for BEVs this year and in 2023, and those which are assembled in Malaysia will continue to have this full exemption until 2025.

The MAA expects the February TIV to be at the January level as it is a short working month due to the Chinese New Year holidays, besides having only 28 days.

Assemblers also expect to be able to complete only limited numbers of vehicles due to some suppliers still recovering from the floods, as well as the global shortage of microchips. All it takes is just one part not to be available and the vehicle cannot be completed and therefore cannot leave the plant.