Tony Khor, president of the Federation of Motor and Credit Companies Association of Malaysia, said the pandemic had not impacted the industry due to the earlier blanket loan moratorium and other government financial incentives.
He also said used car sales had always been less volatile to market shocks, such as the 2009 recession.
“For year-to-year comparison, our July 2020 sales in terms of money spiked some 25%, while July and August sales registered over 17% year-to-year growth,” he told FMT.
Khor said the positive growth in car sales was also supported by the healthy trend of used car supply for this year, especially during the third quarter.
“The July 2020 car sales volume rose 13% from a year earlier and 29% in monthly terms as reported by the Malaysian Automotive Association (MAA).
“This could be due to the number of buyers opting for personal transport, instead of using public transport to curtail their fear of contracting the Covid-19 virus.
“Transaction of new car sales usually in one way or another contributes to used-car trading through trade-ins,” he explained, adding that there was no oversupply problem for used-car dealers at the moment.
“We (used-car dealers) will continue to accept cars,” he said.
Recently, MAA said new vehicle sales in Malaysia surged 5.2% to 56,670 in October this year, up from 53,870 units in the same month last year.
On a month-on-month basis, sales volume for October 2020 rose 0.4% from September 2020, it said.
However, Khor said now that the blanket loan moratorium incentive had ended, dealers might see a dent in demand for cars.
While the government did extend the moratorium until the end of December, the extension is only for those who lost their job in 2020 and are still unemployed.
To encounter the possible decline in sales for next year, he proposed that the government continue providing sales tax exemption for both local and imported cars for a minimum period of six months.
“With car manufacturers continuing to introduce new models, the tax exemption incentive could spur demand, which will also contribute to used-car trading,” he added.
In June, Prime Minister Muhyiddin Yassin announced sales tax exemptions on locally assembled cars (100%) and imported cars (50%) from June 15 to Dec 31 to help the automotive sector.