MAA EXPECTS AUTOMOTIVE SECTOR'S TIV TO HIT 650,000 UNITS IN 2023

PETALING JAYA, Jan 19 (Bernama) -- Malaysia is projected to record a total industry volume (TIV) of 650,000 units in 2023, down 9.8 per cent from the 720,658 units registered last year, said the Malaysian Automotive Association (MAA).

Its president, Datuk 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. 

“After that period, there is no sales tax exemption and most customers have already placed the orders forward. That is why we expect that after the first quarter of 2023 (1Q 2023), the orders will drop and slow down,” she said during a press conference on motor traders and manufacturers’ performance here today.

Aishah noted that MAA had considered the economic and environmental factors in its forecast for the TIV in 2023, 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 that are expected to contribute to the decline of the TIV because it impacts sales and prices will go up.

“Our currency is also weakened compared to foreign currencies, hence, if we buy at a higher price (manufacturing cost), we cannot afford to sell it at 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 1Q 2023. 

“Introduction of many new models with the latest technology advancements and many new electric vehicles (EVs) at affordable and competitive prices should entice and sustain buying interest among consumers.

“The automotive industry continues to face challenges and supply chain issues such as the semiconductor chip shortage, uncertainties in geo-political tension, and the possible resurgence of COVID-19 cases worldwide, among others, which may affect the country’s economic growth momentum and disrupt sales of new vehicles,” Aishah highlighted. 

She said MAA also appeals 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, especially during the first half of 2022 (1H2022); 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 1H2021 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 per cent.

The commercial vehicles segment also registered a high growth of 39.9 per cent 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 COVID-19 pandemic,” she said. 

The total industry production (TIP) of new vehicles in 2022 increased by 220,624 units or 45.8 per cent to reach a total of 702,275 units compared to 481,651 units in 2021.

— BERNAMA