KUCHING: The automotive industry in Sarawak is slowly recovering amid the Covid-19 pandemic.
The movement control order (MCO) began on March 18, and as a result, operations at vehicle manufacturing factories, showrooms and service centres came to a halt because the industry was not in the essential services list.
Only when the conditional MCO (CMCO) was enforced on May 4 to allow businesses to reopen that the automotive industry breathed a sigh of relief, operating again under strict standard operating procedure compliance.
According to the Ministry of International Trade and Industry (MITI), the automotive industry contributes 4.3 per cent to the nation’s gross domestic product in 2019.
Prime Minster Tan Sri Muhyiddin Yassin announced that under the Short-Term Economic Recovery Plan (Penjana), locally-assembled cars would be fully exempted from sales tax while for fully-imported cars, the sales tax would be reduced by 50 per cent from June until December.
This has led to an increase in sales of new vehicles. However, used car dealers are still facing a hard time.
Sales of new cars increase
Association of Malay Importers and Traders of Motor Vehicles Malaysia (Pekema), Sarawak president Tan Sri Abang Khalid Marzuki said with the flexibility given to industry players, especially the automotive industry, in the recovery MCO (RMCO) phase, this had a positive impact on used imported vehicle sales.
“Although demand and sales of used imported vehicles are increasing slowly, we, especially companies under Pekema, are moving on the right track.”
The sales of imported vehicles in April during the MCO saw a 92 per cent decrease compared to sales in March.
“However, in May, an increase of 79 per cent was recorded followed by June and July, also an increase of almost 90 per cent.”
He said this was a positive sign for Pekema members and the national economy in general.
“We are grateful for the incentives and assistance, including the announcement of the sales tax deduction from 10 to 15 per cent for six months under Penjana.”
Abang Khalid hoped that the positive situation would continue. “In fact, we also believe that the recovery is influenced by the assistance we receive from the Computerised Vehicle Inspection Centre (Puspakom) that expedited vehicle inspections.”
Meanwhile, Proton dealer Supernau Motors Trading Sdn Bhd sales manager Robin Kueh agreed that only during the CMCO that vehicle sales started to pick up.
“In fact, starting last month, sales improved quite significantly. We’re hoping this trend will continue and the economy will recover soon.”
During the MCO, sales of Proton vehicles dropped by 50 per cent, but since last month, sales increased above the targeted average of 50 to 60 vehicles in a month, he said.
Perodua branch manager Albert Tiong said during the CMCO and the additional zero sales tax, bookings of Perodua cars went up with a 20 per cent sales increase.
“The response from buyers is good, include first-time buyers and existing ones.”
There are currently over 230 units still awaiting allocation at his branch, but based on Perodua’s headquarters, vehicle production would increase sometime from October onwards due to increased bookings.
Perodua’s target is to achieve a sale of 240,000 units this year, and he believed the target would still remain the same.
Toyota dealer Boulevard Jaya Sdn Bhd sales head Aidwin Aidan Wing said Toyota sales picked up, especially after the announcement of the sales tax reduction.
“According to the data from the Malaysian Automotive Association, there were only 13 units sold in the country in April, and then this increased in May with 3,425 units sold.”
New models would be coming in the final quarter of the year, he said, adding that this would affect buyer decision.
“Among factors contributing to the purchase of new cars now are the sales tax reduction, and also the lower interest rates offered by banks.”
Used car industry seek government help
The demand for used cars is slow and dealers are hoping that both the federal and state governments would find ways to assist them.
According to UCD Distributors Sdn Bhd manager Dexter Kuek, sales were slow currently, and he hoped this would improve soon.
He believed that the new car market was slowly catching up and this would also affect the used car market, because there would be less used cars traded.
From the MCO until RMCO, he said only around 30 to 40 used cars were sold, unlike before the MCO where 20 to 30 units were sold in a month.
“There are a few hundred used car dealers in Kuching. If the supply of used cars is less due to the fact that new cars are not available or sales dropped, it will affect us also in the long run.”
He hoped the government could assist used car dealers in terms of financial assistance, be it big or small.
“If the overhead of a company is big, at the same time we still need to retain our staff who have been with us for more than 10 years, it would be difficult for us to disregard their contributions to the company. Without my staff, our company would not be here for over 40 years.”
Another used car dealer, YSH Motors Trading Sdn Bhd, said during the MCO, it was difficult for the company as there were zero sales.
“For the month of May and June, our sales recorded a 30 per cent decrease compared to normal days,” said branch manager Yeo Shiaw Hui.
He said in July, they sold a few cars but this was still considered very low.
“It’s really tough. I hope the government will help us lessen our burden because we still need to pay our staff’s salaries and other expenses.”