New vehicle sales drop 7.5% in November 2021, SST exemption extension one of the causes

After new vehicle sales rebounded in September and October with triple-digit percentage increases, sales slipped in November according to the Malaysian Automotive Association (MAA).

November 2021 saw 58,742 units sold which is 7.5% lower than October, of which 63,489 units were sold. Year-to-date sales volume for November 2021 was also 4% lower than the similar corresponding period in 2020.

MAA cited the reasons for the drop in sales were the chip shortages and the extension of the sales tax (SST) exemption which is extended until 30-June 2022. As a result of the announcement, many buyers have deferred the purchase of new vehicles.

Also read: Budget 2022: MoF confirms extension of SST exemption/discount until June 2022

Besides sales, November also saw vehicle production reduced compared to the previous month from 65,410 units in October to 58,079 units.

As a result, MAA’s outlook for December 2021 is expected to be maintained at November’s level. The chip shortage may still affect some manufacturers which could result in production and deliveries being delayed.

Also read: As the chip shortage issue continues, what are car companies doing to adapt?

That said, with the year coming to a close, car companies are expected to offer year-end promotional campaigns to spur sales. They are also expected to ramp up deliveries of vehicles to fulfill backlog orders especially for companies whose financial year ends in December 2021.