Covid-19: Dealers bracing for 80-90% drop in sales, no income for sales advisors

Commissions vary by vehicle model. For a cheap Perodua it can be as low as RM 300, but they make up for it by selling a lot more units.

Higher price middle range cars sell less in volume but pay upwards RM 1,000 in commissions per unit. However, stiff competition and price wars between dealers also mean that sales advisors often dip into their own commissions to pay for free gifts or offer more discounts to entice buyers, just so they can hit their monthly target.

“These days, they are lucky if they can earn RM 500 from selling a RM 100,000 car,” said another dealer.

Of course, those selling luxury cars earn more, with some flagship models fetching over RM 50,000 in commissions but realistically, one sales person will probably only sell a few units of such cars a year.

Another Honda dealer told us, “My sales team is very worried. Many of them can’t sleep yesterday. I spent most of yesterday night texting them.”

For most sales advisors, if they don’t sell any cars for a month, they can’t make ends meet by relying on their minimum wage salary.

Although the halt in sales is only for two weeks – that is assuming that the ‘lockdown’ won’t extend longer - the effects will linger longer for more than a month as vehicle deliveries, trade-in, loan approvals are all delayed. Also, remember that the car market has been on a downtrend for more than 5 years already. The car market peaked in 2015 with 666,677 units registered. Last year, the Malaysian car industry ended with just 604,287 units registered.

When asked about adopting the Chinese method of selling cars online, the dealer told us that they have been doing that before the ‘lockdown,’ bringing cars to the customers for test drive and disinfecting the cars after each visit but the Control of Movement Order is made using not just the Infectious Disease Prevention and Control Act 1988, but also Police Act 1967. The latter means that all businesses not listed under essential services must be closed and business owners that flout the law could risk jail.