THE MALAYSIAN automotive sector saw vehicle sales plunged 96% in June to 1,921 units compared to 47,204 in May 2021, mainly due to halted sales operations in many of the states.
More than a quarter of the 6,000 used and new vehicle distribution centres nationwide are expected to close shop in the next quarter if the full movement restrictions continue. Many small dealers are already facing tight cash flow.
Car dealers have to fork out RM120 million a month in employee salaries, rent and loans, while used and new car dealers and credit companies said overheads cost them RM20,000 a month.
The car companies, especially those dealing in second-hand and reconditioned models, are not only affected by the running costs of their operations, but the depreciation of the value of their vehicles. The older makes, meanwhile, are prone to damage, necessitating repairs.
The Transport Ministry, however, have thrown the used car companies a lifeline by allowing the registration and exchange of ownership to take place online, while Puspakom inspections for approval may be arranged by appointment. – August 18, 2021.