Perodua continues to lead in automotive sector
KUCHING: Perodua continued to lead the automotive industry in March as figures showed a dominant market share of 41.1 per cent in March 2018, an increase of 5.1 per cent year over year (y- o-y) from March 2017.
In a report, the research arm of Affin Hwang Investment Bank Bhd (AffinHwang Capital) noted that Perodua’s first three months of 2018 ( 3M18) had grown by 10.5 per cent y- o-y to 55,600 units – accounting for 41.1 per cent go the total industry volume ( TV) in 2018.
“At last count, Perodua had more than 60,000 orders, with circa 28,000 units delivered to date,” said the research arm.
On the other hand, national car maker Proton continues to see weakness as its sales came in a 4,200 – a nine per cent m- o-m increase but a 30.8 per cent y- o-y decline.
AffinHwang Capital expected Proton’s sales to remain depressed for the most of 2018 until the launch of Geely-Boyue in late 2018 which might trigger a comeback.
Looking at foreign marquees, Mazda was March’s top performance gainer with 1,100 units sold thanks to a strong demand for the new CX- 5 launched in November 2017.
This was a 10.9 m- o-m and 37.5 per cent y- o-y increase.
Japan’s Big three brands – Toyota, Nissan, and Honda – ended up reporting weaker sales due to a lack of new model launches.
Nissan took the lead with the steepest decline in March sales of 023.8 per cent y- o-y to 2,000 units, followed by Honda with -17.7 per cent y- o-y to 9,000 units, and Toyota with -16.0 per cent y- o-y to 5,200 units.
On the whole, the entire sector’s TIV fell by 6.9 per cent year over year (y- o-y) to 50,000 units due to softer demands as many consumers adopted a ‘wait and see’ approach as date for polling dates for GE14 in May inched closer.
But month over month (m- o-m), the industry saw a 23 per cent boost in TIV numbers due to a short working month in Feb and rush deliveries by OEMs who have March financial year- ends.
Overall industry analysts are remaining neutral on the automotive sector for now due to a lack of rerating catalysts in sight.
AffinHwang Capital maintained its neutral stance with an unchanged TIV 2018 forecast of 603,800 units or 4.7 per cent increase y- o-y.
“We are expecting a recovery in TIV to be driven by improvement in consumer sentiment; pent-up demand following weak sales in 2016-17; and a string of new model launches in 2018.
Perodua Myvi, especially the premium model, should remain the star performer for 2018,” the research arm guided.
Similarly, Kenanga Investment Bank Bhd ( Kenanga Research) shares the same sentiment but has taken a more cautious stance and have guided that they are expected a milder recovery in TIV of two per cent y- o-y to 590,000.
For exposures, both analysts are confident that Perodua will continue leading the sector in 2018 and have selected to focus on companies who are beneficiaries or are affiliated with the automaker.
AffinHwang Capital was confident of the main leather seat supplier of Perodua, Pecca Group Bhd, while Kenanga Research selected MBM Resources Bhd as its top pick due to its deep value stake in its 22.58 per cent owned Perodua.