New Year, New Hope for Automotive Industry

Entering 2021, the Malaysian automotive industry is still in for a tough year. Total industry volume (TIV) was originally forecast by RHB Research to be at 580,000 units (actual TIV closed at 529,434 units), which is still below the pre-pandemic level of 604,287 sales units recorded in 2019.

A bulk of the forecasted recovery hinges on the recently announced extension of SST exemption for Completely Knocked-Down (CKD) and Completely Build-Up (CBU) cars, from the original deadline of 31 December 2020 to 30 June 2021. But the reimposition of Movement Control Order (MCO) in many key market centres complicates matters.  The situation is still too fluid to make a reasonably strong forecast.

With the COVID-19 situation showing no signs of improvement, Malaysians are expected to remain cautious with their spending. User activity data from’s 11 million users that visited our site in 2020, contributing to 48 million page views, showed that cars under RM100,000 are still the most popular, while brands like Proton and Perodua are the most searched.

The popularity of B-segment Sport Utility Vehicles (SUVs) will continue to increase, mostly due to the affordability factor and introduction of new models like the Proton X50. However, the rise of B-SUVs come at the expense of B-segment Multi-Purpose Vehicles (MPVs), a segment which has seen very little activity last year.

The B-segment sedan  will be  affected slightly but the Proton Persona, Toyota Vios, and Honda City will continue to remain as core models for the respective makes.

Overall, the market share of Proton and Perodua is expected to increase further thanks to new model launches. Proton is expected to introduce an updated Proton Iriz and Proton Persona, while Perodua will launch at least two more models, including a yet-to-be-named compact SUV, codenamed D55L. Both local brands currently control close to 60 percent of the local car market and there is no reason to believe that they will cede any ground in 2021.

Even so, non-national brands especially Japanese marques such as Honda, Toyota, Nissan and Mazda will continue to maintain good momentum in its sales performance. New launches such as the All-New Honda City, Nissan Almera, Mitsubishi Xpander and Toyota Vios will sustain the non-national brands in 2021.

Interestingly, the Nissan Almera recently snagged the Overall Car of the Year 2020 title in the WapCar annual Car of the Year awards with more than 13,400 readers voting for this model as their favourite car of 2020. Meanwhile, the new Honda  City  was  voted  as  the winner under the Editor’s Pick category.

Rewinding back to the start of 2020, there was great anticipation that it would be a good year for the industry. Then the MCO announcement in March 2020 stalled the market for two months but sales picked up again once government announced the 100% sales tax exemption for the CKD models and 50% sales tax exemption for the CBU models. Up until November 2020, the TIV recorded stands at 454,708 units. However, this still falls far short of the 549,439 units recorded for the same period in 2019.

Many hope for 2021 to be a better year. The extension of sales tax exemption until 30 June 2021 will help to boost the sector, but sales are expected to dip once more after that. There are also talks of a General Election being held sometime in 2021. The past two general elections have caused disruptions to new car sales so this will be yet another a risk to the industry.