Disruptive COVID-19 Influencing the Growth of Malaysia's Automotive Industry
Sales tax exemption on new passenger vehicles softens the impact of the COVID-19 pandemic on the automotive industry and promotes transformational growth
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In 2020, Malaysia’s Total Industry Volume (TIV) dropped 12.4%, compared to 2019, with only 529,434 units being sold. The Passenger Vehicle (PV) segment remained dominant with 90.8% market share. The sales tax exemption introduced between June and December 2020 spurred the demand for the segment.
Sales of gasoline powertrain grew from 82.6% in 2019 to 84.2% in 2020, driven by the high demand for passenger vehicles in the second half of the year. Passenger cars make up the most popular segment in Malaysia, racking up to 73.5% market share in 2020. Strong demand is driven by the widest variety of models offered in the market at broader pricing point compared to other segments.
Sport Utility Vehicles (SUVs) witnesses a drastic growth in 2019, as consumers’ preference shifted from Multipurpose Vehicles (MPVs). However, lower average household income due to the COVID-19 pandemic has brought down consumer purchasing power, resulting in a moderate shift from SUV to much more affordable passenger cars.
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