What’s in it for 2H17?

With all this in mind, how will carmakers fare for the rest of the year? AmInvestment Bank has projected TIV growth of two per cent in 2017 to 592,000 units, based on the sales performance of the first five months of 2017, and five per cent for 2018 to 621,000 units as a result of the low base.

As for AffinHwang Capital’s 2017E TIV sales of 592,000, up two per cent y-o-y, it remained intact, supported by new-model launches in the pipeline.

“The stronger TIV growth is premised on the recovery in the local ringgit spurring consumer spending,” the research firm said.

It has however noted that loan-approval rates for new-vehicle purchases will likely remain a challenge.

Meanwhile, HLIB Research maintained its 2017 TIV assumption of 600,600 units, up 3.5 per cent y-o-y, as the research arm expected slower growth in the second half of 2017 (2H17) due to high base effect.

Kenanga Research also left its TIV forecast of 590,000 unchanged given the lack of re-rating catalyst for 2017 as automobiles purchases have been clamped by stringent lending guidelines as well as consumer sentiment lingering at level below the optimistic threshold on higher living expenses.

“Additionally, the recent strengthening of the ringgit against US dollar-Japanese yen is still insufficient to cushion the negative impacts on automakers,” it said.

The research arm expected improvement in consumer spending levels in early 2H17 to lead the recovery of the sector with the recent model launches and forthcoming model launches such as the new Perodua Myvi, face-lifted Perodua Bezza, Honda Jazz Hybrid, Honda CR-V, new Toyota CH-R, Toyota Hilux 2.4G, Toyota Vios 2017, face-lifted Toyota Camry, Mazda CX-5 2017 and Mazda CX-9.

“Companies have traditionally focused their additions onto the second half of the year to gear up for seasonally stronger demand in the last two quarters,” AmInvestment Bank observed.

“Major companies that have slated new models to be launched in the later part of this year included Toyota (which has

resolved to offer more energy efficient vehicle (EEV) cars to gain price competitiveness) and Mazda (its flagship model, the new CX-5 is marked for September).”

Aside from this, the research firm did not discount the possibility of new launches by Perodua and Nissan.

AmInvestment Bank noted that the Perodua Myvi could see a revamp as its last significant update was a facelift on the second-generation Myvi in early 2015, and given that the 2017 Proton Iriz facelift has just made a move to corner the market for cheap 1.3L hatchbacks.

“In the case of Nissan, its distributor had planned to bring in new models only in 2018 soonest but we believe that it could move earlier to save the massive decline in its sales,” the research firm said.

On a side note, Kenanga Research highlighted that the weakening of ringgit against major currency has been hampering the profitability of the OEM players, in contrast with the replacement equipment manufacturer

The strongerTIV growth is premised on the recovery in the local ringgit spurring consumer spending. AffinHwang Capital

(REM) players which are more focused on overseas market and benefitting from the weakening of ringgit.

“Moving forward, to lessen the impact of the unfavourable forex and declining domestic TIV volume, the equipment manufacturer are looking to boost their export sales by participating in various international automotive exhibitions and also engaging with relevant government agencies to facilitate expansion strategies,” it said.