SALES-DRIVEN

THE zero rating of the Goods and Services Tax has revved up new vehicle sales with June posting the biggest monthly sales in recent years. However, tough times are likely to set in when the Sales and Services Tax starts on September 1.

NEW vehicles sales hit arguably their biggest monthly numbers in recent years, with 64,502 units sold in June, thanks to the zero-rating of the Goods and Services Tax (GST).

Last month’s sales also topped Indonesia’s sales for the first time since July 2015, coming second in Asean after Thailand.

The industry’s umbrella group expects brisk sales to continue this month, but hints at rough times in the remaining months of the year when the Sales and Services Tax (SST) kicks in on September 1.

The June sales were 50.1 per cent higher than the 42,983 units sold in May, said the Malaysian Automotive Association (MAA).

MAA said the figure was the highest so far this year.

“Sales were boosted by attractive Hari Raya promotions offered by our members and a reduction in prices due to zero-rated GST,” said its president Datuk Aishah Ahmad.

“We think July is likely to be similar to June because the high demand during this tax holiday period is sustained by the zerorated GST,” she said here yesterday.

The Finance Ministry announced in May that the GST would be zero-rated from June 1. The Sales and Services Tax (SST) will be reintroduced on September 1.

Aishah said MAA members had informed Finance Minister Lim Guan Eng and the Customs Department that vehicle prices would be higher when the SST kicks in.

Consequentially, the group has revised downwards its full-year total industry volume (TIV).

“We have reduced the year’s TIV forecast to 585,000 units from 590,000, because the 10 per cent SST will replace the six per cent GST,” she said.

Aishah said for the first six months of the year, sales rose 1.8 per cent to 289,714 units from 284,453 units in the same period last year.

Passenger vehicle sales rose 2.1 per cent to 261,043 units, while those of commercial vehicle declined 0.1 per cent to 28,671 units.

On the prospect of another national car project, Aishah said there was no need for another one as the local automotive ecosystem was relatively mature.

Last month, during an official visit to Indonesia, Prime Minister Tun Dr Mahathir Mohamad announced the revival of a Malaysia-Indonesia car for the Asean market.

“The proposed Asean car concept can be successful if it is accepted by Asean manufacturers and regulators,” said Aishah.

According to information on the International Trade and Industry Ministry website, there are more than 600 automotive component manufacturers in Malaysia, producing a wide range of components, such as body panels, trim parts, powertrain parts, rubber parts and electrical and electronic parts.

The overall automotive industry and related sectors currently employ around 710,000 people and contributes almost RM30 billion to Malaysia’s economy every year.

There are 27 manufacturing and assembly plants in Malaysia producing passenger and commercial vehicles, composite body sports cars, as well as motorcycles and scooters.