Auto sales seen edging up in coming months
PETALING JAYA: Analysts are maintaining their forecasts for total sales volume (TIV) for the automotive industry with the expectation of higher sales in the coming months.
The local automotive sector recorded a 23.2% month-on-month growth in total industry volume (TIV) for August to 52,300 units, thanks to a longer working month and strong demand for the newly launched Perodua Bezza.
However, TIV dropped 2.2% year-on-year (y-o-y), reflecting weak consumer sentiments. Year to date, TIV dropped by 14.8% y-o-y to 370,300 units, on subdued consumer sentiment and holding back of purchases in anticipation of new model launches by Perodua and Proton in the second half of the year.
MIDF Research said the year to date TIV, if annualised, accounts for 94% of its FY16 TIV of 593,302 units.
“We stick to our numbers as TIV should improve further in the coming months given several new volume model launches in the A and B segments by year end, especially by Proton. After the Persona, Proton is scheduled to launch the new Saga and a rebadged version of the Suzuki Ertiga by year-end,” it said.
Hong Leong Investment Bank (HLIB) Research is also maintaining its 2016 TIV assumption of 613,400 units (-8.0% y-o-y) on the back of strong orders for newly launched Perodua Bezza and Proton Persona as well as anticipated strong demand for upcoming Proton new launches – Saga and Ertiga.
Nonetheless, MIDF Research highlighted that earnings for auto companies under its coverage have deteriorated as sales have been driven by aggressive campaigns and outright discounting, while the ringgit remains relatively weak against the US dollar and Japanese yen.
“We still expect UMW Holdings Bhd and Tan Chong Motor Holdings Bhd to report losses for both FY16 and FY17. Notwithstanding the improvements in August, TIV numbers reported by the respective companies so far are in-line with our expectations,” it said.
MIDF Research said Berjaya Auto Bhd remains its top sector pick, with key share price catalysts over the next 12 months of attractive dividend yield of 7% underpinned by solid net cash; further market share wins driven by new launches; recovery in manufacturing earnings; value unlocking from the potential listing of BAuto Philippines.