Auto sector shows early signs of recovery
KUCHING: Malaysia’s automotive sector is showing early signs of recovering to preCoronavirus Disease 2019 (Covid19) pandemic levels, analysts at the research arm of MIDF Amanah Investment Bank Bhd (MIDF Research) observed in its sector update report.
It highlighted that Perodua reported a 33 per cent year- onyear (y- o-y) growth in June total industry volume ( TIV) at 21,250 units, reflecting maiden ( halfmonth) impact of the tax-holiday incentive announced under the recent National Economic Recovery Plan ( Penjana) stimulus package.
It further pointed out that car prices have generally been reduced by between two to seven per cent (three to six per cent for Perodua) given savings from the sales tax exemption incentive.
As bellwether of the auto industry, it expected Perodua’s strong June performance to signal the trend for sector-wide
Mirroring Perodua’s June performance, channel checks with selective industry players in recent weeks also indicate early signs of sales improvement after the tax holiday announcement under the Penjana stimulus package on June 5. MIDF Research
June TIV to be announced later this month.
“Mirroring Perodua’s June performance, channel checks with selective industry players in recent weeks also indicate early signs of sales improvement after the tax holiday announcement under the Penjana stimulus package on June 5.
“Bermaz Auto Bhd ( Mazda distributor) for example, saw a strong rebound in daily bookings post the automotive tax-holiday announcement; pre-pandemic daily bookings stood at 30 to 40 per day (in-line with 900 to 1,200 monthly sales), while post-MCO daily bookings declined to 20 to 25 per day.
“However, daily bookings ballooned to around 60 per day in the week immediately after the announcement, implying an almost doubling in daily bookings against pre-pandemic levels and a tripling against the post-MCO daily bookings.
“At certain points in fact, BAuto’s daily bookings hit some 99 units per day (triple even prepandemic daily booking levels),” it said.
It also noted that discussions (and briefings) with UMW ( Toyota, Perodua) and Tan Chong ( Nissan) also suggested indications of sales improvements coupled with improved showroom traffic.
“It is difficult to ascertain if this strong trend is sustainable as we are still in the early stages of the 6.5-month-long tax holiday, but these early trends are definitely very encouraging,” MIDF Research opined.
“Notwithstanding dented consumer sentiment given the impact of lockdown measures to contain the Covid-19 pandemic, the strong combination of taxholiday induced demand, robust liquidity created for consumers from various stimulus measures which transfers massive amounts of cash into consumer’s pockets, and a low interest rate environment, are strong catalysts to drive a rebound in vehicle-buying sentiment,” it added.