Globally prevailing shortage ICs and increases in cost of components and materials are expected to negatively affect the automobile manufacturing industry in Malaysia, a local media report has cited Malaysian Automotive Association (MAA) president Datuk Aishan Ahmad as indicating.

Stock R&D director Alexander Chia for Malaysia-based RHB Investment Bank held the same opinion, adding that new CKD (complete knock down) car models will be particularly affected, according to Malaysia-based The Star.

The Malaysian government has extended the exemption of sales tax for locally-produced automobiles until the end of 2021 and this will reduce the impact of IC shortage and rising component and material cost on automakers, Ahmad was cited as saying. For imported cars, sales tax is lowered from 10% originally to 5%.

There were 46,000 new cars sold in Malaysia in May 2021, double the volume in May 2020 but down 19% sequentially, according to MAA.

Sales of 246,000 new cars in January-May 2021 hiked 92.2% on year and MAA expects 2021 sales to reach 570,000, growing 8% on year.

By DIGITIMES