Vehicles sales up 41% in July
MAA: Sales marked second highest TIV in local auto industry history
PETALING JAYA: Total vehicle sales rose 41% to 68,465 units in July from 48,533 units in the previous corresponding period on the back of lower prices due to the zero-rating of the goods and services tax (GST) currently.
In a statement yesterday, the Malaysian Automotive Association (MAA) said sales last month marked the second highest monthly total industry volume (TIV) achieved in the history of the local automotive industry.
“The highest monthly TIV achieved by the industry was 69,371 units in December 2015,” it said.
Year-to-date July, TIV increased to 358,179 units from 333,006 units a year earlier.
The association said sales volume for August 2018 was expected to be maintained at the July 2018 level as the price of cars continue to remain attractive due to the con- tinuation of the tax holiday period until the end of this month.
Last month, the MAA revised downward its 2018 TIV forecast by 5,000 units to 585,000 units as the reintroduction of the sales and service tax on Sept 1 is expected to place a huge damper on vehicle sales.
Demand for cars surged following the zero-rating of the GST by the new Pakatan Harapan government from June 1. Many automobile companies announced zero-rated GST prices, which led to substantial savings for car buyers.
Finance Minister Lim Guan Eng announced last month that the provision of services would be taxed at 6% under the reintroduced SST, while the sale of goods would incur a 10% tax.
Under the SST bill, goods will be taxed at 10%, while the provision of services will be taxed at 6%.
At its bi-annual press conference last month, MAA president Datuk Aishah Ahmad said it was still too early to determine what the quantum would be – when car prices go back up in September.
“It will depend on model-to-model. Also, we are still waiting for the technical details; that is whether it will be the same as what was imposed previously,” she added.
She said stringent hire-purchase loan approvals would also have an impact on car sales.
CGS CIMB said in a recent report that it expected the local automotive sector to deliver higher earnings growth in the second half of this year, driven by stronger TIV growth due to the zerorisation of GST, new model launches and recovery in consumer sentiment.
Total sales hit an all-time high of 666,674 units in 2015, then dropped almost 15% in 2016 before contracting further last year to 576,635 units.