Automakers regain pace with strong September TIV
KUALA LUMPUR: Things are looking up in the automotive segment as total industry volume (TIV) rose in September, encouraging analysts to remain upbeat about the sector’s prospects moving forward.
September TIV came in strong, registering a 26 per cent year on year (y-o-y) increase to 56.444 units.
Researchers at MIDF Amanah Investment Bank Bhd (MIDF Research) said sequentially, this was a seven per cent increase against August’s TIV.
“The strong growth was driven by continued promotional campaigns by players and the tax holiday incentive under the PENJANA initiative,” it said in a report yesterday.
“Year to date, TIV stands at 341,489 units – a 23 per cent contraction – but is progressively narrowing compared to the 41 per cent contraction seen during the first half of the year.”
National cars continue to drive the bulk of September TIV growth, MIDF Research added, as it went up by 44 per cent y-o-y versus just a three per cent y-o-y growth for the non-nationals.
“Perodua registered its highest ever monthly TIV at 25,035 units (rising by 48 per cent y-o-y), while Proton registered a 37 per cent yo-y growth to 11,875 units.”
For foreign marquees, Affin Hwang Investment Bank Bhd (AffinHwang Capital) noted that the cheaper Sales and Services Tax (SST)-exempted car prices and year-end promotional campaigns also led to yoy improvement for most Japanese automakers.
The only exception was Nissan with only 1,100 units sold in September 2020 (drop by 30 per cent y-o-y but rise by 12 per cent month on month (m-o-m)).
“Since the all-new Nissan Almera will arrive on Malaysian shores, we think Nissan should see be er sales volume in the coming months,” it said in separate notes.
“The other Japanese brands registered be er sales in September: Toyota at 5,500 units (rise by three per cent y-o-y), Honda at 5,900 units (rise by two per cent y-o-y) and Mazda at 1,200 units (rise by 168 per cent y-o-y).”
AffinHwang Capital was unable to ascertain the sales performance for BMW/Mini, Mercedes- Benz and Scania as the premium brands did not disclose their sales volumes.
It kept its 2020 TIV forecast remains unchanged at 465,000 units as it expect cheaper SSTexempted car prices and new model launches to support sales in the coming months.
All these signs prompted MIDF Research to anticipate a promising Upcoming third quarter (3Q) earnings season.
“Judging by the strong TIV between July to September, the sector’s 3Q earnings season looks set to stage a solid recovery. Overall 3Q TIV registered at 167,131 units, a 14 per cent y-o- growth and a whopping 147 per cent q-o-q increase – the 3Q20 TIV was in fact the strongest quarter seen in at least the past three years.
“With the exception of Honda and Nissan which registered contraction of 16 and 10 per cent y-o-y, all the other key marques registered double digit TIV growth of between 14 to 47 per cent y-o-y in the period.
“Nevertheless, both Honda and Nissan launched/is scheduled to launch the new City and Almera in October, which should drive a recovery in the remaining three months of the year.”
Also, industry players have been urging the Government to extend the tax holiday incentive until March or June next year, against the current December 31, 2020 expiry.
“While no decision have been made yet, this should provide a positive boost to FY21F TIV, should it materialise, judging by the significant improvement in TIV since implementation of the current round of tax holiday since June this year.”