The shortage of parts and components is due to the suspension of production operations for almost 3-month 

By RAHIMI YUNUS / Pic by HUSSEIN SHAHARUDDIN

CARMAKERS face supply chain problems as parts and components vendors have stalled production due to lockdowns, which could impact delivery to buyers and after repair services. 

After having operations halted for almost three months, auto manufacturers told The Malaysian Reserve (TMR) that they have engaged with vendors to evaluate parts and components supply availability because some suppliers, especially those outside Klang Valley, are having issues with production. 

Original equipment manufacturers (OEMs) still find sales outlook uncertain, risked by the supply issues, despite having a healthy orderbook. 

“Proton is currently assessing the situation on projected production volumes as it involves our entire ecosystem from sales to service, parts availability and our logistics. 

“We will have a better picture of the situation in the coming weeks,” a representative at Proton Holdings Bhd told TMR. 

The company said it would take time to give a sales forecast for the rest of the year, as it is assessing the volume it can produce based on the readiness of its vendors restarting their production lines, taking into consideration the logistical arrangements needed to ensure safe delivery operations across state borders. 

Proton will focus on fulfilling bookings made online during the temporary operational suspension in the past two months. 

Similarly, Honda Malaysia Sdn Bhd, the no 1 car manufacturer in the non-national segment, is coordinating all operations and production activities to meet customers’ demand. 

“As we are in the national recovery phase period, we will monitor the market situation. The car showrooms are allowed to operate as per guidelines and strict standard operating procedures (SOPs). We are doing our best to meet the market needs and fulfil customers’ demands,” Honda Malaysia spokesperson told TMR. 

In a statement yesterday, UMW Holdings Bhd noted that the group would take the necessary measures to increase production and delivery of vehicles to work towards achieving its annual sales targets on the back of encouraging orderbook, the introduction of new models and the extension of the sales tax exemption until year-end. 

UMW Toyota Motor Sdn Bhd delivered 1,450 vehicles in July, while Perusahaan Otomobil Kedua Sdn Bhd sold 655 units. 

“In preparing to resume its operations, we have been working closely with the relevant authorities to ensure that all our employees, suppliers and dealers are vaccinated progressively. 

“We would also continue to ensure strict compliance to the SOPs at all times to ensure the safety of our employees and customers,” UMW Holdings president and group CEO Datuk Ahmad Fuaad Kenali said in the statement. 

Suria Component Manufacturing (M) Sdn Bhd CEO Musa Zahidin Ahmad Zaidee said vendors outside Klang Valley, such as in Perak and Terengganu, might have issues with restarting their production due to lower vaccination rate among workers. 

He said automotive players are only allowed to operate at 60% capacity when 40% of their staff have received double vaccine doses. 

Suria Component, the country’s largest pedal manufacturer and supplier of major OEMs, is in a better position as it is based in Klang Valley compared to other vendors in other states that have a slower vaccination rate. 

“We need all the components to be available and on a timely basis for the OEMs to work smoothly. This depends on the vendor ecosystem. 

“I think it will be a challenge for OEMs to start production smoothly based on the volume required because vendors outside Klang Valley are slow to vaccinate,” Musa Zahidin told TMR. 

As of Aug 22, Pahang, Perak and Terengganu — where some of the OEMs and vendors’ manufacturing plants are located — recorded 41.8%, 43.5% and 45.8% of total first dose vaccination, respectively, according to the Covid-19 Vaccine Supply Access Guarantee Special Committee statistics. 

Kuala Lumpur and Selangor recorded 150.4% and 59.3% of total first dose vaccination, respectively. 

Musa Zahidin said among key components that could be affected is wire harnesses which require high manpower and lack of automation. 

Wire harnesses are critical components in a vehicle’s circuits, electrical and electronics systems. 

Local automotive dealers lost over RM14 billion in business in June and July due to a significant drop in domestic vehicle sales as businesses were closed under the Enhanced Movement Control Order. 

Malaysian Automotive Association (MAA) president Datuk Aishah Ahmad previously said its members, around 1,300 dealers nationwide, had also lost much in revenue from exports of vehicles and components and sales of spare parts locally. 

The auto sector only registered 1,921 and 7,086 units in sales for June and July, respectively, according to MAA data. 

These figures pale by comparison to a typical monthly sale of between 45,000 to 50,000 units. 

Musa Zahidin said automotive players urge the government to review the SOPs based on today’s reality, taking into account the emergence of more contagious variants, more people are vaccinated and the economy is reopening. 

He wants the government to review the blanket restriction rule imposed on the manufacturing sector, begin targeted assessment and reprimand those factories that have poor SOPs adherence that cause an outbreak at their sites.