SST exemption boosted year-end car sales
KUALA LUMPUR: Analysts believe the exemption of the Sales and Services Tax (SST) led to the car sales frenzy seen in December last year, when total industry volume (TIV) went up to 68,836 units, rising by 22 per cent month on month (m-o-m) and 26 per cent year on year (yo-y).
Both m-o-m and y-o-y sales growth were driven by the exceptional delivery of SSTexempted vehicles, with higher production volume at the respective automotive plants, as well as promotional campaigns by carmakers enticing buyers.
Researchers at Kenanga Investment Bank Bhd (Kenanga Research) saw that this was the highest monthly sales since December 2015 which it believed came from last-minute buying frenzy to capitalise on the SSTexempted period which was initially scheduled to end in December 2020.
“We expect a seasonally slower January 2021 sales, affected by the second movement control order (MCO 2.0) but mitigated by SSTexempted sales delivery,” it said in a sector analysis yesterday.
“Taking a detailed look at the passenger vehicles segment, both m-o-m and y-o-y performances tracked the overall unit sales trend on the above-mentioned reasons.
“The strongest monthly takeup rate came from Toyota, Honda and Mazda, while the strongest yearly growth came from Mazda and Honda,” it continued.
“Toyota’s sales growth was contributed by the all-new Toyota Vios, Yaris, and the all-new Toyota Hilux, with overwhelming delivery of facelifted Vios and Yaris which were officially launched on December 17, 2020.
“Honda’s sales mostly came from its top models Honda City, Civic and BR-V with exceptional sales growth coming from the launch of most anticipated allnew Honda City.
“Mazda reported increased delivery for face-lifted CX-5 and all-new CX-8 especially with its attractive six-year/120,000-km warranty and free maintenance (including labour, parts and lubricants) package for new Mazdas purchased (except the BT-50) up to December 2020.”
On other hand, Proton was buoyed by the all-new X70 CKD and X50 CKD (3,384 units sold at 26 per cent of sales), and further supported by the facelifted Proton Saga, Iriz, and Persona.
Proton has officially launched the all-new Proton X50 on October 27, 2020, with the first delivery to customers on November 2020.
Perodua was driven by the all-new Perodua Axia, Myvi, and Bezza, and supported by ARUZ (3,057 units sold at 12 per cent of sales).
Kenanga Research observed that Perodua has reached its current maximum limit, producing up to 25,000 units per month or running at 98 to 99 per cent of its plant capacity from August 2020, which will be maintained until all back-orders are fulfilled; consequently, pushing the launching of Perodua D55L to 2021.
Meanwhile, Nissan’s all-new Nissan Almera has started to propel positive growth for the brand, which the research firm saw was in spite of overall growth still lagging behind other brands from the dearth of all-new model launches.
“We maintain our overweight call on the automotive sector with 2021 TIV target of 585,000 units,” Kenanga Research continued.
“We believe the new volumedriven launches in 4QCY20 could help improve sales with back-logged booking overflowing into 2021 and boosted by the extension of SST exemption to 30th June 2021, seasonal promotions and new launches in the second half of the year.
“Overall, 2021 could potentially be a better year supported by new launches along with better incentives program under the National Automotive Policy 2020, positive impact from Bank Negara Malaysia’s overnight policy rate cut and pre-emptive measures to assist those whom might be financially challenged by Covid-19 impact.”