MAA: 720k cars sold in Malaysia in 2022, 41% up from 2021; Forecasting 10% less for 2023

After two consecutive years in a row of declining sales, the Total Industry Volume (TIV) in Malaysia had turned around to register 720,658 units in 2022, as revealed by the Malaysian Automotive Association (MAA).

Not only it rebounded strongly, the TIV 2022 was a new record; an all-time high TIV achieved in the history of the local automotive industry. It was also the first time the annual TIV exceeded the 700,000-unit mark.

MAA attributes the all-time high TIV recorded in 2022 to the following reasons:

• Pent-up demand for new vehicles especially during the first half of 2022 the authorities' decision to allow buyers with confirmed booking (with sales tax exemption and submitted before 30 June 2022) to register their new passenger vehicles by 31 March 2023.
• Partially due to low base effect, i.e., low TIV in 1H2021 due to the implementation of Full Movement Control Order or FMCO in June 2021.

Also read: MAA: 19,988 hybrids sold in Malaysia last year, up 162% from 2021

"The extension of the period for registration of passenger vehicles not only ensured the rakyat will enjoy the benefit of lower price cars, but it also helped the industry to fulfil the many backlogged orders received.

"On behalf of all MAA members, I would like to express our heartfelt and sincere thanks to the Government of Malaysia for extending the registration period, which indeed had been very effective," said Datuk Aishah Ahmad, MAA President.

"Without this extension and the tremendous amount of support from all the relevant government agencies, the local automotive industry may not have recorded such an exceptionally high TIV," added Datuk Aishah Ahmad

The total registration of new Passenger Vehicles in 2022 rose to 641,773 units from 452,486 units in 2021. This was an increase of 189,287 units or 41.8%.

From August 2022 onwards, the TIV repeatedly recorded a monthly TIV of over 60,000 units. This was because of the fulfilment of bookings by car companies for many bookings received prior to 30 June 2022.

The monthly TIV reached its peak and all-time high in December 2022 when a total of 76,657 units were registered. It was also the second time in 2022 that the monthly TIV had exceeded the 70,000 units mark (the first time was in March 2022 where a total of 73,224 units were registered).

The exceptionally high TIV in December 2022 was due to the rush by automotive companies especially for those with financial year ending December 2022, in ramping up deliveries of vehicles to fulfil backlog orders.

As for the forecast of the TIV in 2023, MAA expects this year’s TIV to reach 650,000 units, which is almost 10 percent less than 2022.

MAA stated a few factors for its 2023 forecast. First of which is global economy growth is expected to slow down and may even fall into a recession this year.

The International Monetary Fund (IMF) had forecasted that global economic growth would slow from 3.2% in 2022 to 2.7% in 2023.

Despite the challenging global economic environment, the Malaysian economy is expected to expand by 4 to 5% in 2023.

The rush to deliver many backlog orders exempted from the sales tax before the end of March 2023 may provide impetus to grow sales particularly in passenger vehicles category in 1Q2023.

The Introduction of new models, particularly new EVs at more affordable and competitive prices, will entice and sustain buying interest among consumers.

Bank Negara Malaysia (BNM)'s decision to increase the benchmark Overnight Policy Rate (OPR) by 25 basis points to 2.75 percent and the fear of further increase in OPR this year (to manage inflationary pressure) could dampen consumer confidence.

And lastly, the automotive industry continues to face challenges and supply chain issues such as shortage of semiconductors chips, uncertainties in geo- political tension, possible resurgence of Covid-19 cases worldwide, etc. which may affect the country's economic growth momentum and in turn the sales of new vehicles.

Also read: MAA: 2,631 EVs sold in 2022 in Malaysia, 860 percent increase from the year before