Published on August 6th, 2021 | by Joshua Chin0
Honda Sales In Malaysia Slashed By Half During FMCO
Only 5,700 new Honda cars were sold locally from May to July of 2021.
With factories and showrooms still shut during the ongoing Full Movement Control Order (FMCO) that was in force since June, it really shouldn’t come as a surprise to anyone then that the local auto industry is beginning to feel the pinch two months on.
Rarely a day goes by after all that there isn’t a story on the news related to workshops having to lay off workers, or of established dealership chains kicking the can. Major automakers too have been increasingly hinting at the government to hear their plight, with the latest in line to do so being Honda Malaysia.
Reporting recently that it had only managed to shift 5,700 cars from May to July this year, Honda Malaysia has recorded a drop in local sales by about 52% from the same period last year. Though poor sales are hardly the only casualty of this lockdown, with the Japanese automaker also lamenting that its supply chain and exportation of parts have been greatly affected during this time too.
“The automotive industry supports a wide network of local components and parts suppliers that comprises a few tiers,” explained Honda Malaysia’s newly instated MD, Madoka Chujo. “These suppliers might not be able to sustain their operations and this will subsequently affect the overall supply chain. The current extended lockdown and no visibility on business resumption timeframe have impacted planning and overall investment of the automotive marques,” she continued.
In continuing the topic of casualties from this lockdown meanwhile, Honda Malaysia’s 101 dealerships nationwide have also been facing their own set of financial difficulties in struggling to stay afloat. Their sales advisors that typically man the front lines have been hit particularly hard during this time, with commissions earned from car sales having all but dried up.
“Honda Malaysia understands the hardship that the dealers and Honda associates are going through, and hence, the company is trying to do its best to assist them during the difficult times. One of the efforts is by registering Honda associates under the Public-Private Partnership Industrial Covid-19 Immunisation Programme (PIKAS) to expedite the country’s rate of vaccination,” Chujo said.
To that end therefore, Honda is targeting 100% of first dose vaccination for all its associates by the middle of this month. The company is also hoping for a resumption of the automotive sector under strict SOPs and guidelines set by the government, which will hopefully prevent any further long-term impact such as retrenchment of employees and potential business closures within the supply chain.
This current lockdown has however has unfortunately already impacted Honda Malaysia’s new model production timeline, due to no testing being conducted in its local manufacturing facilities. So to those then expecting the all-new Civic or HR-V to be launched locally before the end of this year, it might now be wise to revise those expectations as to avoid any potential disappointment.
PRESS RELEASE: Honda Malaysia (or the Company) reiterates its full support for the Malaysian Government’s efforts to curb the spread of COVID-19 by adhering to the Standard Operating Procedures (SOPs) since it was imposed in March 2020. The Company has closed its business operations comprising Honda Malaysia’s plant in Pegoh, Melaka, sales office and dealer showrooms since June 2021 to comply with the implementation of Full Movement Control Order (FMCO) by the Government due to the drastic rise in COVID-19 cases.
During this period, the after-sales services are allowed to operate at dealerships nationwide with minimal manpower and only selected after-sales services are available by appointment. To ensure the process is with minimum contact and easier for customers, the HondaTouch application enables customers to make their appointment through a more systematic approach.
Honda Malaysia Managing Director and Chief Executive Officer, Ms. Madoka Chujo said “With only certain after-sales services allowed and sales and manufacturing operations on halt, it is no surprise that sales have plunged. Honda Malaysia saw a decline of 52% in car sales for the year-on-year period of May to July 2021. We sold about 5,700 units in this period compared to close to 12,000 units sold in the same period last year when the country was under Conditional Movement Control Order (CMCO) and Recovery Movement Control Order (RMCO).”
“The prolonged business closure has also impacted Honda Malaysia’s new model production due to no testing conducted in the manufacturing facility. Furthermore, the Company’s supply chain and exportation of parts are also affected. The automotive industry supports a wide network of local components and parts suppliers that comprises a few tiers. These suppliers might not be able to sustain their operations and this will subsequently affect the overall supply chain. The current extended lockdown and no visibility on business resumption timeframe have impacted planning and overall investment of the automotive marques,” Ms. Chujo continued.
Even more worrisome is the domino effect it has had on all 101 Honda authorised dealers who face financial difficulties and the uncertainty of employment for sales and service advisors as well as other staffs at the dealers. The sales advisors whose income largely depend on commission earned, have been severely impacted.
Ms. Chujo also added, “Honda Malaysia understands the hardship that the dealers and Honda associates are going through, and hence, the Company is trying to do its best to assist them during the difficult times. One of the efforts is by registering Honda associates under the Public-Private Partnership Industrial COVID-19 Immunisation Programme (PIKAS) to expedite the country’s rate of vaccination. The Company targets to achieve 100% of first dose vaccination for all its associates by mid-August 2021. As Malaysia has one of the world’s fastest vaccination rates, the Company hopes to achieve its vaccination target and subsequently the nationwide vaccination programme will help create a safer environment for Malaysians. Honda Malaysia is appreciative of the hard work of all the frontliners who have been working tirelessly to help fight the pandemic.”
Honda Malaysia hopes that should the early resumption of the automotive sector be possible under strict SOPs and guidelines set by the Government, there will be no long-term impact such as retrenchment of employees and can help to mitigate potential business closure among the supply chain.