Expect New Cars Sales For June To Be Almost Zero

That’s about d RM3.44 billion in revenue lost

  • By: Dinesh
  • Friday, 25 June 2021
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Expect New Cars Sales For June To Be Almost Zero

The first lockdown in 2020 and the subsequent restrictions were a catalyst for carmakers in the country to speed up their virtual showrooms. Many of them put in place procedures that simplified the process of purchasing a new vehicle without having to visit a physical showroom.

Nonetheless, the traditional method of acquiring a new vehicle still relies heavily on potential customers visiting showrooms and that’s not going to change anytime soon.

The time-consuming documentation for registration and loans still need to be addressed and with showrooms closed, that limits the avenues for completing that major part of the process. Having completed that, it’s possible to move on to the next step via the road transport department’s (JPJ) e-Daftar.

Therefore, it shouldn’t be a surprise that the current lockdown from 1 June 2021 to 28 June 2021 will see almost zero new car sales that follows the dip in sales for May 2021.

With car showrooms closed for the duration of the lockdown, you can expect no new registrations for the month of June 2021. The exceptions will be a handful that already had their loans approved prior to the lockdown and a Letter of Undertaking (LoU) issued.

It could very well be a reflection of April 2020 that saw a measly 141 registrations for new vehicles.

The report by Berita Harian mentions that the average vehicle sales price of RM70,000 per unit would reflect losses of around RM3.44 billion for the industry in June 2021 alone.

Nonetheless, even with the lockdown bottlenecking sales for this period, most parties in the industry expect it to recover and record a total industry volume (TIV) that far exceeds 2020’s number.

One of them is Kenanga Research, that believes the SST exemption extension to the end of the year will continue to spur sales once the lockdown is lifted. Together with the offers and rebates carmakers put forward, it projects a TIV of 545,000 for 2021.

Further echoing that sentiment is CGS-CIMB. It predicts an increase net profit by 34 per cent; largely aided by restrictions loosening up in the second half of the year.

Lastly, TA Securities predicts an extremely ambitious TIV of 627,000 units; 18.4 per cent higher than 2020.

For reference, the Malaysian Automotive Association (MAA) gave a TIV forecast of 570,000 units; an 8.0 per cent growth from last year. Nonetheless, the final figures will be revised as the year progresses as sales depend heavily on the loosening of movement restrictions.

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