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Drop in June car sales [02-07-2011]  
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The amendments to the Hire-Purchase Act 1967 (HPA) that took effect on June 15 has caused delays in vehicle registrations and should result in lower total industry sales for the month.

Car players said the drop did not mean people were buying fewer cars but reflected the longer time to book a sale and they expect the registration numbers to smoothen out in July.

When contacted, a Honda Malaysia Sdn Bhd spokesperson said daily vehicle bookings at the Japanese marque's authorised dealers had dropped by almost 50% since the amended Act took effect.

“However, vehicle demand remains strong, and our showrooms' visitor traffic is high. The decline in vehicle bookings is due to the amended Act which requires longer documentation and paperwork process between the banks, car dealers and customers,” said the spokesperson.

Local Nissan vehicle distributor Edaran Tan Chong Motor Sdn Bhd (ETCM) said vehicle registrations were expected to be 15% down for June.

ETCM executive director Datuk Dr Ang Bon Beng said the amendments had created a lot of anomalies in the car-buying process and delays for the company to secure sales.

“The HPA has created a negative impact and we are already feeling it. We expect sales in June to be down by 15%,” he told StarBiz.

“Buying a car has become more complicated with more variables to address. It becomes harder for customers to buy a car,” Ang added.

Under the amendments, all used vehicles for sale will undergo Puspakom's 18-point inspection to ensure their roadworthiness.

Another issue of contention was the 1% maximum booking fee (based on the total selling price) mandated by the amended Act, which requires car sellers to refund customers 90% of the booking fee if the deal falls through.

Unlike the past, presently car sellers or dealers cannot accept booking fees before the car buyer is served with a Second Schedule notice.

The Second Schedule notice can only be completed and served on the car buyer usually after the hire-purchase loan application is approved.

The remaining 9% downpayment on the car can only be paid when the hire-purchase agreement has been prepared, with details such as the car's chassis number included.

This means the hire-purchase agreement can only be prepared after the actual car unit has been allocated to the dealership.

“The new (car-buying) process is slow. The Government should look into the matter,” said Ang.

Meanwhile, sources in UMW Toyota Motor Sdn Bhd also claimed that Toyota passenger car sales saw a year-on-year sales decline in June due to the amended Act.

A Proton Holdings Bhd spokesperson said that due to the amended Act, its vehicle sales declined between 20% and 30% in June.

“The sales decline in June is in comparison with our average monthly sales,” said the spokesperson.

According to reports, the Malaysian Automotive Association (MAA) intends to meet with the Domestic Trade, Cooperatives and Consumerism Ministry to “iron out” issues concerning the HPA.

MAA members include car marque franchise holders and auto assemblers in the country.

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