Automotive sector’s TIV in July ‘to be better’ as festive sales continue
KUCHING: The total industry volume ( TIV) of Malaysia’s automotive sector is expected by analysts to be better in July while others expect it to improve slowly in the second half of 2016 (2H16).
In an automotive sector report, the research arm of TA Securities Holdings Bhd ( TA Research) highlighted that TIV in June came in significantly better than the previous month at 57,400 units with a month on month (m- o-m) gain of 28.4 per cent and year on year ( y- o-y) slight decline of 0.1 per cent.
According to TA Research, the m- o-m increase was driven by Ramadan festive sales, which boosted sales volumes of major marques, including: Perodua, Proton, Toyota, Nissan and Honda.
TA Research expected TIV in July to be better as Ramadan festive sales continue.
“In addition, the recent release of Perodua’s sedan ‘Perodua Bezza’, will further boost sales volumes,” it said.
The research arm has meanwhile noted that y- o-y change was mixed, with Proton, Toyota and Volkswagen showing declines whereas the rest of the major marques showed y- o-y growth.
It further noted that year to date ( YTD), total TIV declined by 14.5 per cent to 275,500 units.
Meanwhile, RHB Research Institute Sdn Bhd (RHB Research) pointed out in its auto and autoparts sector update that 1H16 TIV reached 275,471 units, reaching 45.9 per cent of its 2016 TIV forecast of 600,000 units.
According to RHB Research, it was a strong month for Perodua, with the company sales hitting a new high in 2016, registering 20,044 units in June.
“Perodua is targeting for its new Bezza sedan to achieve monthly sales of 10,000 units during the first three months, before moderating to 7,700 units per month.
“However, we expect a high level of cannibalisation of other existing Perodua models given that the price of RM37,300- 50,800 is similar to that of other Axia and Myvi models,” it said.
As for the non-nationals, RHB Research pointed out that Honda is still at the top spot, but it expected Toyota to catch up, with its new Sienta and Innova in 2H16.
In addition, the research house expected Honda and Mazda’s sales volume to stay strong with the recently-launched Civic and the introduction of diesel models (CX- 5 and 6) respectively.
On luxury marques, TA Research observed that BMW, Volkswagen , Mazda and Mercedes were the best performing marques in 1H16.
The research arm believed this trend confirms the rationale that stringent hire purchase ( HP) loan requirements have subdued TIV for the general masses.
“On the other hand, luxury marques have remained strong as they are typically purchased by individuals with substantial disposable income and hence less difficulty in securing HP loans.
“Therefore, we believe sales volume of these marques are more resilient as compared to other marques that target the general population,” it said.
Following the exceptionally weak TIV YTD, TA Research noted that the Malaysian Automotive Association ( MAA) has revised their forecast to 580,000 (down 13 per cent) units.
“The split between passenger vehicles and commercial vehicles are 515,000 units and 65,000 units respectively.
“Correspondingly, forecasts for 2017-20 were also reduced,” it said.
The research arm noted that MAA’s revision was underpinned by lower gross domestic product ( GDP) growth, weak consumer confidence and more stringent HP loan approvals.
“Nevertheless, this will be partially offset by new model launches and most recently, the Overnight Policy Rate cut to three per cent from 3.25 per cent,” it added.
TA Research nevertheless still maintained its TIV forecast of 604,000 units in 2016.