In light of the ongoing Covid-19 pandemic, the Malaysian Automotive Association (MAA) has revised its total industry volume (TIV) forecast for 2020, lowering it from the 607,000 units it projected in January to 400,000 units, The Star reports.
According to MAA president Datuk Aishah Ahmad, the outbreak and resulting movement control order (MCO) from March 18 has severely impacted car sales and consumer sentiment. Following discussions with its members, the association decided to revise its TIV forecast for the year, she told the publication’s StarBiz section.
The new numbers represent a 33.8% contraction from the 604,287 units managed in 2019, and if the projections ring true, it would be the first time in 13 years that the TIV has not breached the 500,000-unit mark.
The updated forecast follows on the association’s announcement of March vehicle sales made yesterday, which showed that sales for the month had dropped by 44% compared to February. It was also 59% lower than the same period last year, a reduction that was in line with analysts’ projections.
On April 13, MIDF Amanah Investment Bank Research (MIDF Research) had said in a report that preliminary indications suggested a 47% to 63% year-on-year reduction in vehicle sales volume in March.
It also slashed its TIV forecast – based on the MCO going into phase four – to 504,850 units for 2020, and said that if the MCO was to be extended to phase five until the end of May the numbers would drop to around 480,000 to 490,000 units.
While it had previously not ruled out pent-up demand returning post Covid-19 to drive some form of demand recovery, the research house said that the extended MCO and the deep, negative implications on corporate earnings, employment security and consumer sentiment would have a significant impact on the industry.
It said that any pent-up demand that existed previously would have probably withered away by now, with consumers having likely to have adopted a “survival” mode outlook, with little priority for discretionary spend in the near-term. Looks like it’s going to be a rough 2020, folks.
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