Is the Malaysian car sales market shrinking or not?

We look at the production and Malaysian car sales for April 2022.

There has been some concern among financial institutions and some insurance providers (particularly car insurance providers) as the registration number of new cars has been slowing down in recent months. 

For the month of April 2022, the figure stands at 56,213, which we believe to be healthy as it is not that much lower than the sales figure from April last year, 2021 which is 58,329. It must be noted that this shared figure from the Malaysian Automotive Association includes the sales of commercial vehicles (trucks, vans and buses).

With a drop in total sales, there will also be a drop in new insurance purchases and loans and this is not a reflection of the economic situation (for now) or the effects of a depreciating Malaysian currency against the US Dollar which is the prime purchasing medium for Malaysian car retailers. 

If you visit most car showrooms in Malaysia right now, you will see happy smiling salespeople as the business is brisk and people want new cars. There are of course some brands that are not seeing high showroom traffic and this is simply because they have yet to launch new and up to date vehicles to keep up with their rivals. Brands like Nissan, Renault, Ford and Mitsubishi come to mind. Still, with their current lineup of models, there are rising waiting lists because of certain popular models.

Then there are brands that have been having delivery issues. Yes, they have a growing customer base but the factory cannot deliver due to the global shortage of semiconductor chips followed by the European war which has closed some component factories in Ukraine and surrounding countries. Hyundai, Kia and Volvo are facing this issue. 

There is also a further issue which is the backlog of shipping that has left many ports stuck with high volumes of stagnant containers.

To make matters worse, the Covid-19 lockdown in parts of China has stopped the production of electronic and also component parts for many vehicles and motorcycle manufacturers around the globe as they rely on these parts to assemble vehicles. With a few or even one vital part missing, a whole vehicle manufacturing line will come to a halt. Brands feeling this are Proton, Toyota, Honda and even Mercedes-Benz.

So, right now, there are ample customers for new vehicles in Malaysia, it is all about supply and these 'slow sales numbers’ will continue for the next 12 to 18 months. 

Also read: Will CKD car prices rise in 2023 or not?