It was a tough year for automobile sales in 2021, as you might have expected, but new data from the MAA have revealed some interesting insights into how Malaysia is performing relative to our neighbouring countries.
Predicting that sales for new vehicles would substantially increase over 2020’s sharp decline led to a (revised) predicted TIV of 500,000 units. However, the year-to-date numbers that ended in November 2021 saw a figure of 441,136 vehicles.
However, by the end of the year, the market did experience a late surge to 508,911 units as December 2021 closed out, exceeding the 500k TIV target. That said, it was still a 4 percent decrease (-4%) over the previous year’s 529,514 units despite the year-on-year contraction being much less than the 12.4% decline in 2020.
YBhg Datuk Aishah Ahmad, MAA President, said that this can be attributed to: “the measures and wisdom of our government in balancing between saving lives and jobs so as not to jeopardise the domestic economy,”
“The extension of the sales tax exemption incentive under PEMERKASA+ package till 31 December 2021, had also helped to sustain the demand for new passenger vehicles”, she added.
It is true that 2021 saw more days spent in ‘lockdown’ than in 2020 with increased government-imposed closures in businesses and interstate (sometimes inter-district) travel, thereby making for a very tepid response from the buying public that, coupled with the non-operation of showrooms and service centres, contributed greatly to the slight but continuing decline.
Regionally, it was Indonesia that saw the largest uptick in vehicle sales. As of end-November 2021, The Association Of Indonesia Automotive Industries (GAIKINDO) reported a 66% year-to-date TIV improvement compared to 2020 (474,898) with 790,524 vehicles sold.
Like us, Thailand also saw a slight decline (-3%) over their total 2020 sales numbers with a TIV of 668,109 vehicles, as reported by the Thai Automotive Industry Association (TAIA), compared to 688,507 vehicles in 2020.
Elsewhere in ASEAN, and apart from Myanmar which saw a brutal 46% TIV decline over 2020, the market seems to have had a dose of Indonesia’s optimism with positive numbers reported by Singapore (+7%), Vietnam (+3%), and, impressively, the Philippines with a 23% percent increase over the previous year.
While Thailand shared a similar situation with Malaysia in terms of new vehicles sold, they performed significantly better than us with regard to vehicle production numbers, managing to churn out 1,531,337 vehicles in 2021 over 1,284,001 vehicles in 2020. That’s a 19% increase year-on-year and a very clear sign of an automotive industry in strong recovery.
That said, Malaysia did not perform as well with a contraction of 0.4%, leading to a production count of 427,485 units compared to 429,294 units in 2020.
It should be a much different story this year, however. MAA has published a TIV forecast of 600,000 units by the end of 2022, which would be an 18% increase over the numbers achieved in 2021.
Alongside much fewer pandemic-related disruptions, the Malaysian government has continued to extend the SST exemption (or discount) for passenger vehicles until June 30th, 2022. Also, there has been a massive incentivisation effort to promote the adoption of fully electric vehicles, which enjoy a waiver on import and excise duties alongside a 100% road tax exemption.
Also, the Malaysian government had projected positive GDP growth of 5.5 to 6.5% in 2022. The growth is expected to be driven primarily by an expansionary Budget 2022 along with normalisation in economic and social activities.
Keyword: Malaysia Sold 4% Fewer Cars In 2021 vs 2020, Among Slowest Recovery In ASEAN