Car Sales Dropped In Malaysia Due To Chip Shortage And Extended Sales Tax Exemption

This is MAA’s latest report on the Malaysian car sales and production in our industry.

After more than three months of continued expansion, 2021 car sales takes a hit in Malaysia. October 2021 showed significant growth with a 43% increase in sales versus September 2021. However, the Malaysian Automotive Association (MAA) has revealed that performance in November 2021 slipped a little. Sales dropped by 7.5% versus October 2021 and compared to last November, it’s 4% lower.

According to the MAA, this drop in sales is attributed to the government’s announcement that the sales tax exemption on new car sales would be extended until the middle of 2022. We feel that this is only half the story, as the electric car tax exemption probably also influenced some Malaysians to hold off on a premium car purchase in anticipation of major EV launches coming early in 2022.

This probably affects premium car brands more than national car brands, as they’re the ones with a greater selection of EVs ready to be brought in and their customers are more equipped to make the transition to electric mobility.

Supply side problems And Outlook For December

According to the MAA, production figures were also down in November. This time, the reason is attributed to the ongoing global semiconductor shortage.

MAA says sales numbers in December will more or less match those in November 2021 with year-end promos probably incentivising customers who are looking to wait for a 2022 vehicle.

Here’s the press release.

PRESS RELEASE

1. PRODUCTION
   1.1

2. SALES
   2.1

3. Market Performance in November 2021 YTD Sales volume for November 2021 was 4% lower than similar corresponding period year 2020. Total Industry Volume (TIV) for November 2021 was 7.5% lower than October 2021 (which was at 63,489 units only)
   ● shortage of chip and some parts had affected production of certain makes
   ● consumers may have deferred purchase of new vehicles since sales tax exemption incentive has been
   extended till 30 Jun 2022
4. Outlook for December 2021 Sales in December 2021 is expected to be maintained at November 2021 level.
   ● Companies’ year end promotional campaigns to spur sales
   ● Companies ramped up deliveries of vehicles to fulfil backlog orders especially for companies
   with financial year ending December 2021
   ● Shortage of chips may affect certain makes