If you’ve just booked a 2022 model, chances are you won’t get it until July or August

• Global shortage in parts to continue until 2023
• For high-in-demand popular models, delivery before June is unlikely
• Buyers urgently in need of a new car should consider certified pre-owned cars as an alternative

Car dealers across Malaysia are in a difficult position. Their order books are full but their showrooms are empty. With no cars to deliver, customers are screaming at them daily.

The government has been accommodating to their demands in extending the sales tax cut, extending the original cutoff date of 31-December 2021 to 30-June 2022.

Now that they’ve collected a lot more orders, continued disruptions in the global supply chain is stopping dealers from delivering cars to customers within the tax exemption period.

Take Honda dealers for example. The Honda Civic RS has been immensely well received, and you thought the RM 6k increase from the mid-range Civic V variant was too much for too little?

Unless you’ve booked your Civic RS on the month it was launched, chances of you taking delivery of your Civic RS before 30-June is very slim.

To qualify for the sales tax-exempted / deducted price, the vehicle must be registered no later than 30-June 2022 - but there will be a one month grace period until July, applicable only to cars manufactured in June or earlier.

“With the successful launch of the all-new Civic early this year, customer response towards the new model has been positive and we have received overwhelming demand. Due to the current demand, we would like to inform that the waiting period for all-new Civic will be slightly longer. Rest assured we are working towards to deliver the all-new Civic to customers in due time,” said a spokesperson for Honda Malaysia.

It’s more or less the same situation with Honda’s rival Toyota. If you’ve recently booked a Toyota Corolla Cross or a Toyota Hilux, don’t expect to get your car until July, or even August.

The situation with Toyota is even more acute because the waiting period is just as long regardless of variant. At least with the Civic, customers opting for the lower range Civic E or V variants are likely to get their car by June.

Other Toyota models like the Toyota Vios and Yaris also face delays but to a lesser extent.

There are some even more extreme examples - waiting period for the Mercedes-Benz GLE has now stretched past one year!

Other Mercedes-Benz models like the C-Class, GLA, and GLC have waiting period stretching past June.

Even ageing but popular models are not spared. The waiting period for a Perodua Bezza is now about 5 to 6 months, depending on variant.

Why can’t my dealer tell me when I can get my new car?

Never mind your local dealer, because even the manufacturing principal’s mother plants at their home country are struggling to keep production lines running consistently.

Dealers are complaining that they are not getting updates from the headquarters but that’s also because management teams at the headquarters themselves don’t know any better. 

They too rely on communication from their manufacturing principal overseas, who are struggling to secure enough parts for their global operations.

What is causing the delay?

The simple answer is a global shortage of automotive parts and an increase in cost of raw materials and logistics.

The entire automotive industry has been facing a severe global shortage in electronic parts since end-2020, when economies around the world reopened after Covid-19 lockdowns.

Also read: After MCO, chip supply shortage is slowing car production in Malaysia

When businesses resumed and demand spiked following months of zero activity, semiconductor foundries couldn’t keep up with demand for chips for laptops and home entertainment devices – gadgets that are in high demand in this era of reduced travel and hybrid / home offices.

At the same time, semiconductor manufacturers have little incentive to prioritize automotive clients – who typically buy chips that are several generations older than the ones used by smartphones.

On its own, that's not a problem but automotive clients also the most demanding, due to the stricter safety and reliability standards required for cars. All these combine to make for low profit margins for semiconductor manufacturers.

Unlike laptops, automotive manufacturers face greater legal liability. The electronics in a car must be resistant against high temperatures in the engine bay as well as freezing weather, be insulated against water splashes, vibration, and more importantly – must work flawlessly for at least 10 years / 200,000 km.

A laptop doesn’t need to last more than 3 years and if a user spills coffee on his laptop, that’s his problem. A BMW’s iDrive control however, must not jam or cause the driver to lose control of the vehicle should coffee be spilled on it.

The situation in Ukraine and Russia is further complicating matters. We live in a globalized world with interconnected logistics, where disruption in one part of the world can have an impact on another end of the world.

Ukraine for example, is the world’s biggest supplier of neon gas, an important raw material necessary for semiconductor parts manufacturing.

Ukraine is also one of the world’s biggest supplier of automotive wiring harnesses.

Two of the largest of manufacturer of automotive wiring harnesses – Yazaki and Sumitomo Electric Bordnetze have exposure to Ukraine and it’s not a simple matter of arranging plants in other countries to suddenly make up for the shortfall in output from Ukraine.

The current shortage of automotive electronic parts will not ease until 2023.

“Every OEM is fighting to secure an allocation for themselves, from the same group of suppliers. It’s not just one part, but thousands of parts, from so many suppliers. Syncing the logistics with production schedules in such an uncertain environment is near-impossible,” said an automotive industry veteran, who also explained that car plants cannot just start and stop on a whim, but manufacturing has to stop even if there is a shortage of just one bolt.

Stellantis’ CEO Carlos Tavares, who oversees the Fiat Chrysler and PSA Group recently warned investors that recovery will be very slow. “2022 will not be the year we can say we are back to normal,” he said.

Last week’s earthquake in Japan also caused further disruptions, as many manufacturing plants had to be shut down for between 3 to 5 days for repairs.

Over in China, many manufacturing plants have cut back on their operating hours as there is a shortage in coal, coupled with high energy prices, and the government’s target to rollback dirty coal. The problem however is that renewable energy is not coming online fast enough.

It’s the same situation in Western Europe.

There’s also a sharp increase in shipping cost, driven by increase online shopping as well as labour shortage post-pandemic.

All these seeming unrelated issues combine to cause a perfect storm for a prolonged global shortage, as well as increase in manufacturing and logistics cost.

How long is too long to wait for your new car?

Unless you are buying a low demand model, the current SST-exempted price is not really relevant anymore.

It doesn’t matter which brand you are buying, as long as it’s from the typical Proton, Perodua, Honda, Toyota, Mitsubishi, Mercedes-Benz – you are unlikely to get your car before 30-June.

If you are taking out a loan (hire purchase) to buy your car, note that there is a validity period on the bank’s offer. This can range from 1 month to 3 months.

Ask your sales advisor / bank loan officer on how long before the loan offer expires, and what happens if the dealer is unable to deliver the car to you by then.

Also read: Can’t get your SST-exempted car before June 2022? MAA confirms one month grace period until July

Some banks require you to re-apply, while others will renew your application automatically.

Also, don’t bother hounding your sales advisor daily, as he/she has no say in the building, transportation and allocation of the car.

Having said that, a good sales advisor will keep you updated regularly. A simple weekly update saying estimated delivery time is still unchanged, or that he / she is still following up, is the minimum expectation that any car sales person should meet.

If your sales advisor ghosts you for weeks, demand to speak to the outlet manager or email the brand’s customer care channel to have your booking transferred to another sales advisor.  

Consider certified pre-own cars / Carsome’s 5-day money back guarantee

If you urgently need a car, for example if your current car has been declared a total loss in a flood, consider certified pre-owned cars.

Certified pre-owned cars are the next best thing to a new car, because unlike regular used cars, these cars have verified mileage and vehicle history that's been checked out to meet the manufacturer's standards.

Unless you are given the full service record of the car, it's a given that tampered odometer is ‘free gift’ when buying from a used car dealer. Some used car dealers have been known to rewind the odometer before sending the vehicle for an oil change at an authorized service centre, thus masking its tampered mileage, hence the emphasis on full service history.

Certified pre-owned cars also undergo the manufacturer’s inspection standards, and are covered by a 1-year manufacturer’s warranty that runs on top of the existing warranty (where applicable).

Used car dealers will also offer you warranty but these are third party warranties, and don’t necessarily cover the whole car.

The downside is that prices of certified pre-owned cars are higher, outlets and choices are also not as plenty.

Honda for example, only has 6 certified pre-owned outlets while Perodua only has one.

Another alternative is Carsome.my. While it’s not backed by any manufacturer, buyers enjoy a 5-day no questions asked money back guarantee. Surely that’s more than enough to answer any doubt.

And unlike a manufacturer’s certified pre-owned cars outlet, Carsome offers plenty of choices, and buyers can check out the cars virtually thanks to their high resolution 360-degree camera.