8% TIV growth forecast for automotive sector in 2021

KUALA LUMPUR – The Malaysian Automotive Association (MAA) has forecast 2021’s total industry volume (TIV) at 570,000 units, an 8% increase from the 529,434 units recorded last year.

President Datuk Aishah Ahmad said this year, passenger and commercial vehicles are expected to record sales of 513,000 and 57,000 units, respectively.

The expectation of a global economic recovery, including in Malaysia, the continuation of the sales tax exemption for passenger vehicles under the National Economic Recovery Plan (Penjana) until June 30, and lower hire purchase loan interest rates will help spur sales, she said.

“Coupled with the many economic stimulus packages initiated by our government, MAA is optimistic that the local automotive market will rebound in 2021,” she told a virtual media briefing on motor traders and manufacturers’ performance for 2020 today.

She said the introduction of new models at competitive prices will contribute towards sustaining buying interest.

“Aggressive promotional campaigns by car companies will also boost sales.”

She said the higher-than-expected sales performance of 184,121 units recorded in the fourth quarter of 2020 – up from 161,296 units in the same period a year earlier – helped reduce the expected decline in TIV.

“For the full year of 2020, TIV stood at 529,434 units, a decline of 12.4% year-on-year (y-o-y) from 604,281 units.

“Despite the double-digit drop, it was nonetheless a good achievement for the local automotive industry, given the extremely challenging business environment, and was higher than the 470,000 units that MAA had forecast.”

She attributed the better-than-expected performance mainly to the sales tax exemption for passenger vehicles under Penjana from June 15 to December 31 last year.

The government had announced a sales tax exemption of up to 100% for “completely knocked down” passenger vehicles, and 50% for “completely built up” units.

Meanwhile, sales of passenger vehicles fell 12.6% y-o-y to 480,965 units in 2020 from 550,177 previously, while commercial vehicle sales declined 10.4% y-o-y to 48,469 units from 54,104.

The production of new vehicles in 2020 decreased 15% y-o-y to 485,186 units from 571,632, mainly due to the movement control order that took effect on March 18, and in tandem with lower overall sales for the year. – Bernama, January 21, 2021