MAA president Aishah Ahmad said passenger and commercial vehicles were expected to achieve sales of 585,000 and 65,000 units, respectively, this year.
“The main reason for the decline in our TIV forecast is the end of the sales tax exemption on March 31, 2023. Most customers have already placed their orders forward.
“That is why we expect that after the first quarter of 2023 (Q1 2023), the orders will drop and slow down,” she said during a press conference on motor traders and manufacturers’ performance here today.
Aishah said MAA considered the economic and environmental factors in its TIV forecast, namely the global economic growth that is expected to slow down and may even fall into a recession this year.
“The slowdown of the global economy is among the factors expected to contribute to the decline of the TIV because it impacts sales and prices will go up.
“Our currency has also weakened compared to foreign currencies, hence, if we buy at a higher price (manufacturing cost), we cannot afford to sell it at a loss,” she said.
Among others, Aishah said the rush to deliver backlog orders exempted from the sales tax before the end of March 2023 might provide impetus to sales, particularly in the passenger vehicles category in Q1.
“Introduction of new models with the latest technology and new electric vehicles (EVs) at affordable and competitive prices should sustain buying interest among consumers.
“The automotive industry continues to face challenges and supply chain issues such as the semiconductor chip shortage, geopolitical tensions and possible resurgence of Covid-19 cases worldwide, may affect our economic growth momentum and disrupt sales of new vehicles,” Aishah said.
She said MAA also appealed to the government for EV incentives to be extended for a longer period, until 2030, and not just on a yearly basis.
Meanwhile, Aishah said the historic all-time high TIV recorded in 2022 was attributed to the pent-up demand for new vehicles; the authorities’ decision to allow buyers with confirmed bookings (with sales tax exemption and bookings submitted before June 30, 2022) to register their new passenger vehicles by March 31, 2023; and partially due to the low base effect.
She also said the low TIV in H1 2021 was due to the implementation of the full movement control order (FMCO) in June 2021.
The total registration of new passenger vehicles in 2022 rose to 641,773 units from 452,486 units in 2021, an increase of 189,287 units or 41.8%.
The commercial vehicles segment also registered a high growth of 39.9% or 22,488 units to reach 78,885 units.
“The improvement in sales of commercial vehicles was due to increasing demand as companies started to invest in anticipation of an economic rebound after two years of slowdown due to the impact of the pandemic,” she said.
The total industry production (TIP) of new vehicles in 2022 increased by 220,624 units or 45.8% to reach a total of 702,275 units compared to 481,651 units in 2021.