Which segment of the automotive industry is most affected by the halt?

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Car Dealers Are Most Affected by the Production Halt

The automotive industry segment most severely impacted by the halt in operations since June 1, 2021, is car dealerships, particularly smaller ones that depend entirely on new vehicle sales for their revenue. This disruption has led to significant financial strain and difficulties in retaining staff within this sector.
Severe Decline in Sales and Production Volumes

The prolonged shutdown, especially in the Klang Valley, has drastically reduced both sales and production figures for motor vehicles over the past two-and-a-half months. In June and July 2021, total industry sales stood at a mere 1,921 and 7,086 units, respectively. This is a substantial drop from the typical monthly total industry volume (TIV) which normally ranges between 45,000 and 50,000 units. Similarly, total industry production for the same period was significantly curtailed, reaching only 276 units in June and 2,775 units in July, far below the usual monthly production of 40,000 to 50,000 units.
Financial Distress and Staff Retention Challenges for Dealerships

Many car dealerships are grappling with severe cash flow issues as a direct consequence of the halted operations. The inability to generate sales income has made it challenging for these businesses to meet their financial obligations and retain their workforce. Sales advisors, in particular, are facing job insecurity as dealerships struggle to maintain operations and revenue streams.
Substantial Financial Losses Across the Industry

The cumulative financial impact of the production and sales halt is substantial, with total losses exceeding RM14 billion from domestic vehicle sales alone over the past two months. These figures do not account for additional revenue losses from the export of vehicles and components, nor from the sales of local spare parts, indicating that the overall economic damage is considerably higher. The Malaysian Automotive Association (MAA) represents approximately 1,300 dealers nationwide, highlighting the extensive reach of this impact.

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Which segment of the automotive industry is most affected by the halt?

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