June 2021 Malaysian vehicle sales plunge by 96%

The Malaysian Automotive Association (MAA) has released vehicle sales date for the month of June 2021, announcing earlier today that a total of 1,921 vehicles were delivered last month. This is a drop of 45,283 units from the 47,204 units (revised upwards from the 46,663 units reported last month) sold in May, or a 96% reduction in volume.

Last month’s total was also a drop of 42,834 units (or 95.7%) from the corresponding month in 2020, when 44,755 units (originally, 44,695 units) were shifted. However, the year-to-date numbers for 2021 is still ahead of that last year, with the 249,129 units managed in the first half of this year being 75,584 units (43.6%) more than the 173,545 units that were recorded in the same period last year.

The massive plunge isn’t surprising, given that all car showrooms were closed when the country went into lockdown on June 1, and remain so in phase one of the national recovery plan (NRP), with the exception of Sabah, where showrooms are now allowed to operate under phase two.

What is surprising is that there were sales, which the association said were spillover registrations from May. In this case, the situation is similar to that which occured last year during the first movement control order (MCO) – it remains possible to register a car online during the lockdown, but the absence of sales activity means that the cars will not be able to be delivered.

In essence, these registrations were for vehicle purchases in which car loans had already been approved pre-lockdown and for which a Letter of Undertaking (LoU) had already been issued. The completion of the registration is so there will be no lapse in the agreement, which would entail needing to go through the whole process again.

With July almost over and showrooms still closed, the association expects that sales numbers this month will be minimal. Despite the sales tax exemption, which was supposed to have ended on June 30, having been extended to the end of the year, car registrations aren’t expected to swell tremendously even when showrooms open.

That’s because production has also been static as a result of assembly plants also being closed, only scheduled to resume only in phase two of the NRP. Indeed, with two months lost at this stage, the race looks to be on to see if buyers from this point can get their orders fulfilled to take advantage of the SST savings before the year is out, especially for much-in-demand models such as the Perodua Ativa, Myvi and Proton X50, given that there is already a significant backlog in orders for these.

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