KUALA LUMPUR, Feb 16 — Sime Darby Bhd expects demand for its luxury cars to remain strong in its markets despite the uncertainty amid the Covid-19 endemic phase.
Group chief executive officer Datuk Jeffri Salim Davidson said this is backed by the fast and huge growing upper middle class group that has more disposable income in the markets where it operates.
“They have money to spend and they will spend on nice and luxury cars,” he said in a virtual media briefing on the group’s second-quarter results ended December 31, 2021 (Q2) of financial year 2022 (FY 2022).
However, he said the group is experiencing some supply constraints in the automotive sector such as shortages of chips, whereby its manufacturers in Germany rely on chips, namely from South Korea, Malaysia and Taiwan to produce the vehicles.
“Besides, due to a strong recovery in various industries in economies such as the United States (US), they are importing most autoparts to their markets. This means that there is a shortage for the rest of the world,” said Jeffri.
Nonetheless, he said this situation is temporary and would eventually recover, although it would take some time of about six months or so.
“Generally, despite the constraint, I still think we should be able to get enough volume of cars for selling to the market,” he said.
Add to that, Jeffri also does not see any passive impact arising from the interest rate increase in the US given its strong order book and strong demand from countries including China and Malaysia.
On the electric vehicle (EV) segment, he said prospects for EV continues to be good in Malaysia and the group would consider having EV for completely knocked down (CKD) and become among the EV charging operators in the future, when the time is right for the group’s business.
Commenting on the impact of the Sales and Services Tax (SST) exemption for new vehicles that would end on June 30, 2022, he said the people are now still rushing to purchase vehicles before the deadline.
He foresees there would be a natural short-term dip in demand of about two to three months before demand restabilises.
The SST exemption was first announced in June 2020, and was extended several times to spur demand within the local automotive market.
Meanwhile, on the plan to list its healthcare unit, Ramsay Sime Darby Health Care Sdn Bhd, Jeffri said the plan is now put on hold as the group is currently looking at various opportunities to grow the healthcare business. — Bernama
