Published on May 29th, 2023 | by Subhash Nair0
The Malaysian TIV Shrunk By 41% From March to April 2023. Why?
The Malaysian Automotive Association’s data shows a massive drop in TIV from March to April.
According to the latest data from the Malaysian Automotive Association (MAA), the local automotive industry experienced a decline in new motor vehicle sales in April 2023 after three consecutive months of growth. A total of 46,583 units were registered during this period whereas the month before saw an record high of 78,849 cars sold in a single month. Why is that?
MAA chalks it down to two factors. The first, is the end of the PENJANA Sales Tax exemption scheme whereby carmakers were expected to deliver all sales tax free orders by the end of March. This makes sense, as there were no doubt many Malaysians looking to get their discounted vehicles while they could, particularly on the premium side of things where 6% of sales tax can amount to a nice holiday package.
The other reason cited was the shorter work month in April due to the Hari Raya Aidilfitri holidays. This to me is a little bit of a stretch but could be plausible too. We’ve also looked at historical data and found that March-to-April sales drops are pretty common in Malaysia. In 2016, the drop was 13.7%, in 2017, the drop was 20.4%, in 2018, 5.8% and in 2019, 8.8%. Many companies also end their financial year in March, which ends up in a big sales push to meet targets the month before April. That being said, 41% is nearly unprecedented in non-COVID times.
MAA still wants the industry at large to remain optimistic despite this HUGE 41% drop in sales month-on-month. March 2023 was an exceptional sales month for Malaysia and the overall total vehicle registrations year-to-date for 2023 is still 10% higher than it was in 2022 (239,183 vs 217,452 units). They’re also steering the market towards optimism, saying that this month will end with a recovery in sales as supply chain problems ease.
It would be a lot easier to analyse MAA’s data if it was broken down by brand as it used to be not long ago. However, for undisclosed reasons, carmakers are now more selective about their sales data.