Published on July 21st, 2022 | by Subhash Nair0
MAA: Car Sales Up 33% In 1st Half Of 2022, TIV Revised Up
2022 is proving to be a great year for car sales, and MAA has to revise their numbers.
In the first half of 2022, the Malaysian Automotive Association (MAA) reports that 331,386 vehicles have been registered. This represents a 33% increase (82,208 unit difference) in car sales versus the first half of 2021. MAA attributes this increase to the low TIV of 2021 due to the multiple Movement Control Orders that hampered sales and production throughout last year.
Except for April, every month so far in 2022 has seen better car sales than the corresponding month in 2021. Even then, the difference in sales for April was 1%. March 2022 represented an all-time high TIV for Malaysia with 73,244 cars registered. MAA attributes the uptick in sales to be caused by the pressure of ending the financial year on a high note for many car companies.
There was another uptick in sales in June as the SST exemption expired, but the numbers would have been higher if not for the shortage of components affecting the supply side of things. Here’s a chart for reference.
On the production side, there was also a large increase of 31.8% versus the same period last year. 317,933 vehicles were produced in Malaysia in the first half of 2022 versus 241,288 units in the first half of 2021.
MAA has decided to revise their initial TIV forecast for 2022 from 600,000 units to 630,000 units. Here are the reasons for the revision in MAA’s own words.
1) Malaysia is expected to continue its recovery momentum this year, after the country’s first-quarter 2022 performance saw a growth of 5%. According to the Ministry of Finance (MOF), this recovery will be supported by increases in domestic and external demand, as well as labour market recovery. The MOF is maintaining its official GDP forecast of 5.3% to 6.3% for 2022.
2) The authorities believe with the government’s consistent policy support, particularly initiatives under an expansionary Budget 2022, as well as the spill over effects from Budget 2021 and previous stimulus and assistance packages, our country’s economy will continue to improve during the second half of the year. Coupled with the smooth transition to the endemic phase as well as the reopening of international borders, many sectors are showing signs of growth in business activities, albeit not yet reaching the pre-
3) The various economic stimulus packages to mitigate the adverse impact of the COVID-19 pandemic and to revive economic activities have been very helpful. For the automotive industry, despite not having the PEMERKASA Plus plan for car buyers to enjoy sales tax exemption extended beyond 30 June 2022, MAA members are happy and pleased that the authorities have allowed buyers with confirmed booking to register their vehicles by 31 March 2023. This measure is indeed a positive one as it will help the automotive industry to fulfil backlogged orders while at the same time allowing the rakyat to enjoy lower price cars.
4) Introduction of new models such with latest designs and features as well as electric vehicles at affordable and competitive prices may assist to sustain buying interest.
5) Continuation of efforts to fulfill backlogged orders and promotional campaigns by car companies to boost sales and maintain market share.
6) Events arising from geopolitical tensions, escalating oil prices, inflationary concerns, increase in food prices, increase in logistics and shipping costs and supply chains disruptions may dampen our country’s economic growth outlook and in turn consumers’ demand for new vehicles.
7) Bank Negara’s decision at its Monetary Policy Committee (MPC) meeting on 6 July 2022 to increase the Overnight Policy Rate (OPR) by 25 basis points to 2.25 percent may dampen consumer confidence.
8) Businesses may hold back investments in view of the on-going uncertainties at the global level as well as our domestic political scene. Many analysts are expecting that the 15th General Election (GE15) will take place within the year.
9) Ongoing continuation of components and chips shortages may dampen production of motor vehicles during the year.