PETALING JAYA: Malaysian Automotive Association (MAA) has revised upwards it’s total industry volume (TIV) forecast to 470,000 units from 400,000 units initially, on the back of the government’s sales tax exemption and introduction of new models at competitive prices that may sustain buying interest.
Despite the revised forecast, MAA president Datuk Aishah Ahmad cautioned that consumer sentiment is still expected to remain weak due to the uncertain economic environment.
“Businesses are likely to hold back investments in view of continuing uncertainties,” she said at the MAA’s 2020 half-year sales briefing today.
“There will be stricter vetting by financial institutions on applications to obtain hire purchase loans as banks are very cautious during this period of uncertainty.”
Under the Short-Term Economic Recovery Plan announced by Prime Minister Tan Sri Muhyiddin Yassin last month, locally-assembled cars will be fully-exempted from sales tax while for imported cars, the sales tax will be cut from 10% to 5%, until Dec 31.
Meanwhile, TIV in the first half of 2020 plunged 41.1% to 174,675 units from 296,317 units in the previous corresponding period, as a result of economic disruptions resulting from the country’s movement control order to curb the spread of the Covid-19 pandemic.
In April, the MAA revised downwards its 2020 TIV forecast to 400,000 units from 607,000 units it had projected in January.
This year’s sales forecast marks the first time in 13 years since the TIV failed to surpass the 500,000-unit mark.
According to historical data, the last time vehicle sales failed to breach the 500,000-unit mark was in 2007, when TIV stood at around 480,000 units.