The 2021 Budget gives some relief, but is it enough to the automotive industry?
Over the weekend, we got news that the Full Movement Control Order (FMCO) would be extended indefinitely, with Phase II coming in only when daily COVID-19 cases dipped below the 4,000 mark. The Prime Minister announced a number of assistance packages as part of Budget 2021.
One of which was a blanket 6-month loan repayment moratorium for all Malaysians regardless of income level. Even though no documentation is required, one still needs to make an application with one’s bank and sign an amended loan agreement form. SMEs may also apply, with companies being considered on a case-by-case basis.
Besides that, some Malaysians can expect BPR payments:
- RM1300 for poorer households, RM500 for poor individuals
- RM800 for B40 households, RM200 for B40 individuals
- RM250 for M40 households, RM100 for M40 individuals
For the auto industry, the measures laid out may not quite be enough.
Car dealerships have had to shut themselves down fully or partially throughout the FMCO. Some brands without a strong online presence may have real trouble selling any cars at all throughout the month of June. Sure, there were some measures announced that would allow SMEs to lower the salaries of employees temporarily, but will this be enough to compensate for a complete lack of revenue? Last year was already a major blow to many of these dealers and now things are worse than ever.
Car companies operating in Malaysia also continue to suffer. Factories are already having problems with the global semiconductor shortage. Now they must also deal with a lockdown with no end date and an economy that isn’t all that conducive to new car purchases. The used car dealers too have no remedy in sight.
Yes, the government has extended their SST exemption and discount for cars until the end of 2021. However, as explained before, this discount doesn’t really do much for cars that most Malaysians can afford. Should the government do something a little more drastic to really spur the economy, like revise car prices and give foreign investors an ACTUAL roadmap towards electrification?
How many closures, job losses and worse can we pull out can we expect in 2022 the way things are going?
You can read the full Budget 2021 speech in English here.
