KUALA LUMPUR:Malaysia's total industry volume (TIV) is projected to grow to 570,000 units in 2021, an increase of eight per cent from the 529,434 units recorded last year, said the Malaysian Automotive Association (MAA).

Its president Datuk Aishah Ahmad said passenger and commercial vehicles were expected to record sales of 513,000 and 57,000 units, respectively, this year.

The expectation of global economic recovery including in Malaysia, continuation of the sales tax exemption incentive for passenger vehicles under the National Economic Recovery Plan (PENJANA) until June 30, 2021, and lower hire purchase loan interest rates would help to spur sales, she said.

"Coupled with the many economic stimulus packages initiated by the government, MAA is optimistic the local automotive market will rebound in 2021," she told a virtual media briefing on the motor traders and manufacturers’ performance for 2020 today.

Aishah said the introduction of new models with the latest additional specifications, design styles and at very competitive prices, would also assist in sustaining buying interest.

"Other than that, aggressive promotional campaigns by car companies will also boost sales," she said.

She said the higher-than-expected sales performance of 184,121 units recorded in the fourth quarter of 2020 compared with 161,296 units achieved in the same period in 2019, had helped to reduce the expected decline in the TIV.

"For the full year 2020, TIV stood at 529,434 units, a decline of 12.4 per cent year-on-year (y-o-y) from 604,281 units in the previous year.

"Despite the double-digit drop in TIV, it was nonetheless a good achievement for the local automotive industry given the extremely challenging business environment, and was higher than the 470,000 units that MAA had forecast," she added.

She attributed the better-than-expected performance due mainly to the sales tax exemption incentive for passenger vehicles under PENJANA package from June 15, 2020 to Dec 31, 2020.

Under the PENJANA package, the government announced a sales tax exemption of up to 100 per cent for completely-knocked down (CKD) passenger vehicles and 50 per cent on completely built up (CBU) passenger vehicles.

Meanwhile, sales of passenger vehicles fell 12.6 per cent y-o-y to 480,965 units in 2020 from 550,177 units in 2019, while commercial vehicles sales declined by 10.4 per cent y-o-y to 48,469 units from 54,104 units previously.

Production of new vehicles last year also decreased by 15 per cent y-o-y to 485,186 units compared with 571,632 units in 2019, due mainly to the enforcement of the Movement Control Order (MCO) on March 18, 2020 and also in tandem with the lower overall sales in 2020.

-- BERNAMA