Minister: Car industry projecting 34pc fall in 2020 sales volume

Employees work at an assembly line in the Proton manufacturing plant in Tanjung Malim December 16, 2019. — Reuters pic
Employees work at an assembly line in the Proton manufacturing plant in Tanjung Malim December 16, 2019. — Reuters pic

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KUALA LUMPUR, July 22 — The Malaysian Automotive Association (MAA) has revised its projection for commercial and private vehicle sales in 2020 to fall from 607,000 to 400,000, Parliament was told today.

Datuk Seri Azmin Ali told the Lower House during Question Time that this was due to the unintended economic consequences triggered by the Covid-19 pandemic that saw Malaysia go into a partial lockdown under the movement control order (MCO) from March 18 to May 4.

“MAA have (originally) projected a Total Industry Volume (TIV) of 607,000 units for 2020 which includes commercial and private vehicles. They have revised their target to 400,000 units after taking into consideration the current economic condition.

“April saw only 141 units being sold when compared to March which registered 22,478 units being sold. Following the government’s decision to reopen some economic sectors beginning May 4, the number of vehicle sales rose with a TIV of 22,960 in May.

“However, the number of sales is still far below the 60,760 units sold in the same period last year,” said the international trade and industry minister in his reply to the question from Bangi (PH) MP Ong Kian Ming.

On the sale of motorcycles, Azmin said 19,507 units were sold in May this year and a further 42,190 units in June, following zero sales in April.

Regarding the government’s efforts to assist the sector, the minister said that there is a 100 per cent sales tax exemption for locally assembled vehicles with a 10 per cent tax for vehicles at manufacturing price.

“If Mak Cik Kiah wants to buy a Perodua MyVi 1.3g, a locally assembled vehicle, the original price is RM44,590 but with the sales tax exemption, she only needs to pay RM43,029 which is a reduction of RM1,561 or 3.5 per cent,” said Azmin.

As he was giving an example for an imported car buyer, one Mr Ong who planned on purchasing a Mercedes Benz, the minister was interrupted by Shah Alam MP (PH) Khalid Samad who accused him of racial stereotyping.

Azmin then substituted “Mr Ong” with “Encik Khalid”.

“If Encik Khalid is buying a Mercedez Benz, the original price would be RM658,888. With the tax exemption, he now just needs to pay RM646,626 with a price reduction of RM12,262 or 1.6 per cent,” said Azmin.

He also stressed that the tax exemptions are limited to factory price and not on the road price.



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