Impact of the New Coronavirus in Malaysia: Automakers Expect Sales Recovery Due to the Sales Tax Exemption on New Vehicle Purchase

Economic activity, including automotive production and sales in Malaysia, has halted from later March to the middle of May in 2020 due to the national lockdown. The situation will likely bring a serious economic impact, possibly resulting in a remarkable shrinkage of the automotive market in 2020. Under this circumstance, the Malaysian government implemented a car sales tax reduction in June 2020 to prevent the car sales from slowing down.

On March 18, 2020, the government issued the 2020 Movement Control Order (MCO) for the entire nation. Due to this order, all automotive assembly sites have been closed until early May 2020. Since the MCO restriction requires dealer stores to be closed, the production and sales in April declined 99% year-on-year. From May to June, the MCO restriction was slightly relaxed (a conditional MCO), the production and sales have been gradually recovering.