Malaysia’s automotive plants, distributors and showrooms were cleared to restart on 16 August 2021 after a two-and-a-half-month pandemic shutdown, putting the sector on course for what MIDF Research calls a “sustainable recovery” once vaccination thresholds are met and deferred demand returns.
Plants reopen with stocked kits and back orders
The government’s 10 August relaxation order allowed every link in the automotive value chain to switch the lights back on, ending a freeze that had idled assembly lines since early June. MIDF Research says inventories of completely-knocked-down kits are “well stocked” because ports stayed open during the lockdown, giving assemblers a head start in clearing the production shortfall. Showrooms, too, are sitting on a pipeline of orders placed two to four months before the restrictions, cushioning the restart phase. “With supply and demand levers moving in tandem, we expect the industry to claw back lost volume progressively,” the brokerage told clients on 26 August.
Tax break and cash aid to spur buyers
A sales-tax holiday that runs until 31 December 2021 remains the sharpest near-term incentive. MIDF calculates that the waiver, combined with low interest rates and cash transfers under the Pemerkasa+ stimulus package, could pull forward purchases that were postponed during the lockdown. The research house has “buy” calls on Bermaz Auto Bhd (target RM 2.20), MBM Resources Bhd (RM 4.20) and UMW Holdings Bhd (RM 4.30), arguing that retail reopening should convert pent-up bookings into revenue before the incentive expires.
Klang Valley pace hinges on jab rate
Klang Valley, the country’s largest vehicle market with 41 percent of total industry volume (TIV), had fully vaccinated 64 percent of its adult population by the third week of August. MIDF notes that 53 percent of national TIV originates from states that have already crossed the 50 percent threshold, suggesting foot traffic can return sooner than in earlier waves. “Once showrooms reopen and test drives resume, we expect the conversion rate from existing bookings to improve markedly,” the firm said. The Ministry of International Trade and Industry, coordinating the restart, has told brands to limit showroom capacity to 50 percent and enforce digital check-ins, but has not imposed a blanket cap on daily sales.
90 percent plant workforce fully vaccinated
A survey of listed assemblers and parts makers shows that more than nine in ten factory employees have received both vaccine doses, a rate that outstrips most state averages. The Public-Private Partnership Industrial Covid-19 Immunisation Programme (PIKAS), launched in July, channelled Pfizer and AstraZeneca supplies directly to automotive zones in Selangor, Perak and Pahang. “The high uptake among workers means lines can scale up quickly once the 14-day post-second-dose window lapses,” said MIDF. Lines will run at roughly 60 percent utilisation for the rest of August while the final cohort completes its waiting period, then climb to pre-pandemic takt time by the first week of September.
October vaccine goal set as recovery marker
National immunisation coverage of 80 percent among adults remains the informal trigger for full economic reopening. The Special Committee for Ensuring Access to Covid-19 Vaccine Supply (JKJAV) reported on 25 August that the seven-day average of daily doses had surpassed 500,000, putting the October target “within reach,” according to MIDF. If the pace holds, suppliers predict fourth-quarter TIV could top 180,000 units, narrowing the year-to-date gap to 2019 levels and setting up 2022 for low single-digit growth.
The restart is not without speed bumps. Global semiconductor shortages are still rationing electronic control units, and local parts vendors must re-hire casual workers who scattered during the shutdown. Yet the combination of tax relief, stocked inventories and a vaccinated workforce gives the industry its clearest runway since the pandemic began. Should buyers respond as they did after the first movement-control order, when September 2020 sales leapt 26 percent month-on-month, the sector could finish 2021 down only 8 percent instead of the 15 percent once feared, cushioning Malaysia’s wider manufacturing rebound.
