National cars to fare better than foreign marquees
KUALA LUMPUR: In the midst of a slowdown, analysts believe that demand for national cars should fare better compared to that for non-national cars in 2020.
Affin Hwang Investment Bank Bhd (AffinHwang Capital) made this call as Perodua’s top position added to the resurgence of Proton have resulted in the national carmakers’ combined market share outpacing that of the non-national carmakers since January last year at 58.1 per cent.
Notably, the national carmakers’ market share in February 2020 soared to all-time high of 66.6 per cent
“With the absence of new model launches from the nonnational carmakers, we think the national carmakers will continue to dominate the local mass market space,” AffinHwang Capital shared in a sector outlook yesterday.
“Given the weak economic outlook, we believe the downtrading trend is gaining pace in the domestic automotive market, where sales of cheaper national brands with refreshed line-ups have continuously outpaced the pricier Japanese cars.”
Meanwhile, carmakers in Malaysia — especially the nonnational brands — are still experiencing a delay in car pricing approvals for new model launches.
“Recall that Mazda faced this issue with the facelifted CX-5 and all-new CX-8, which had resulted in a 39 per cent year on year (y-o-y) decline in
Bermaz Auto’s 2QFY20 Malaysia revenue.
“Besides Mazda, other models that were reported to be affected are the facelifted Honda HRV, facelifted Civic and Accord, Toyota Rush and Vios as well as the CBU Proton X70.
“Some non-national brands began taking orders for their respective new models based on an issued estimated pricing, but was/are still unable to sell any units in the meantime.”
Another key sector concern is the possible price hike in selected car brands. During the reign of the Pakatan Harapan government, a new excise duty regulation was gazetted on December 31 2019.
Under the terms of the new regulation, the new methodology of the open market value of a vehicle would result in an increase in on-the-road (OTR) car prices in 2020 for both CKD and CBU models.
“Although the Ministry clarified that prices of completely knocked down cars would not be affected by this revision, we sensed a mismatch in opinions as Honda said that customised incentives were different from the earlier-announced excise valuation regulation, and subsequently raised car prices between five to nine per cent,” AffinHwang Capital noted.
“The uncertainty in car prices, in our view, will reduce the appetite for non-national car models moving forward, although this is likely a small fraction of total industry volume.”