Auto sector’s total industry volume for first four months of 2017 within expectations
KUCHING: The automotive sector’s first four months of 2017 ( 4M17) total industry volume (TIV) of 42,746 units came in within analysts’ expectation.
According to the Malaysian Automotive Association (MAA), sales volume in April 2017 was 20 per cent or 10,972 units lower than March 2017.
This was attributed to the rush for deliveries by companies having financial year ending March 31, 2017, changes in the SUV/4X4 excise duty structure possibly having affected sales and stringent hire purchase loan approval.
At the same time, the research arm of Kenanga Investment Bank Bhd (Kenanga Research) believed consumers were also withholding their purchases in anticipation of new model launches in the second half of the year.
“However, sales volume in April 2017 was 1.3 per cent or 544 units higher than the similar corresponding month in 2016,” MAA said.
Kenanga Research observed that the year on year (y-o-y) TIV grew marginally despite more attractive line-ups in April 2017 as well as aggressive promotional activities.
That said, the association highlighted that TIV for year to date (YTD) April 2017 was six per cent higher than the similar corresponding period in 2016.
The research arm attributed the stronger YTD growth to the aggressive discounts and promotion for the purpose of inventory clearing of the older models before the roll out of the newer models anticipated in the second half of the year.
“In addition, the stronger numbers were also contributed by the wide variety of new model launches, such as the face-lifted Perodua Axia, the new Proton Saga, the new Proton Persona, Proton Ertiga, the face- lifted Toyota Vios, the new Toyota Innova, the new Toyota Corrolla Altis, the new Honda Civic, the new Honda BRV and face-lifted Honda City.
“Toyota and Honda remained the outperformers with the highest YTD growth of 56 per cent and 40 per cent respectively due to its wide variety of new models, as well as aggressive promotion.
“Whereas, Nissan and Mazda continued to be the underperformers due to lack of new models launches to attract consumer attention,” the research arm said.
On estimates, Kenanga Research made no changes to its year-end forecast as the research arm believed its target was achievable with more robust sales in months to come with the forthcoming model launches such as the face-lifted Perodua Myvi, face-lifted Perodua Bezza, Honda Jazz Hybrid, Honda CRV, the new Toyota CH-R, Toyota Hilux 2.4G, Toyota Vios 2017, face-lifted Toyota Camry, Mazda MX-5, face-lifted Mazda 3, Mazda CX-5 and Mazda CX-9.
That being said, the research arm’s view on the sector remained conservative as consumer purchases of automobiles have been clamped by stringent lending guidelines as well as prevailing weakness in sentiment resulting from higher living expenses.
“Additionally, the recent strengthening of the ringgit against US dollar/Japanese Yen is still insufficient to cushion the negative effects of the Automakers’ business,” it said.
While it is too early to call a trend, the research arm of MIDF Amanah Investment Bank Bhd (MIDF Research) opined that this is nevertheless, broadly positive for sector earnings moving into the second quarter.
All the auto players under MIDF Research’s coverage will benefit from the stronger ringgit i.e. Bermaz Auto Bhd (Bermaz Auto) mainly from the Japanese yen and UMW Holdings Bhd ( UMW) or Tan Chong Motor Holdings Bhd (Tan Chong) from the weaker US dollar.
The research arm noted that for Bermaz Auto, every one per cent change in the Japanese yen will impact financial year 2018 forecast ( FY18F) earnings by three per cent.
“For UMW and Tan Chong, every one per cent change in the US dollar will impact FY17F by 6.5 per cent and 35 per cent respectively ( Tan Chong is forecasted to register losses in FY17F/18F),” it said. THE Malaysian rubber market closed lower yesterday, weighed down by the downtrend in regional rubber futures markets despite improvement in the crude oil prices, a dealer said.
However, the dealer said the decline in rubber prices were capped by a weaker ringgit against the US dollar which depreciated to RM4.3020 compared with