Automotive sector: New launches to offset weak macroeconomic conditions

KUCHING: The weak macroeconomic condition, and possible delays in new car launches will be offset by exciting new launches, the research arm of Kenanga Investment Bank Bhd (Kenanga Research) notes in its automotive sector update.

According to Kenanga Research, industry sales are on track to meet its targeted 2019 total industry volume (TIV) target at 600,000 units and envisaged 2020 target at 612,000, in line with Malaysian Automotive Association (MAA).

“We believe the weak macroeconomic condition, and possible delays in new car launches given the backlog of pricing approvals ( three to five months) will be offset by exciting new launches, especially by the non-nationals and better incentives programme under National Automotive Policy (NAP) 2020, tentatively to be unveiled on the first quarter of current year 2020 (1QCY20),” Kenanga Research said.

“The Ministry of International Trade and Industry (MITI) has decided to increase the frequency of the monthly meetings held by the Automotive Business Development Committee (ABDC), chaired by MITI, from once to twice a month to speed up the vehicle pricing approval process.

“On the other hand, MITI has established a trade and advisory council (TIAC), which will discuss issues on subjects ranging from foreign direct investment (FDI) and domestic direct investment (DDI) to the NAP in its upcoming meetings ( with a minimum of four meetings per year).”

Looking forward to 4QCY19/2020, vehicles sales volume for 4QCY19 is expected by Kenanga Research to be stronger than 3QCY19. Additionally, the research arm also projected the year to end with at least 600,000 units, driven by the continuation of aggressive yearend promotional campaign especially by players which have their financial year ending Dec 31.

It highlighted that year to date (YTD) new launches include Perodua ARUZ, the facelifted Honda HR-V (includes Hybrid), face-lifted Proton Saga, IRIZ and Persona, Toyota Vios, Toyota Yaris, Toyota Rush, T32 Nissan X-Trail facelift, 2019 Proton Exora RC, Mazda 3 (Sedan and Hatchback), face-lifted Perodua Axia, all-new A90 Toyota Supra (CBU), face-lifted Mazda CX-5 (CKD, Oct 22), and all-new Mazda CX-8 (CKD, Nov 13).

“Upcoming new launches include the, face-lifted Honda Accord and Civic, Mazda CX30 (CBU, 1QCY20), Proton X70 (CKD, 1QCY20), Proton X50 (CKD, 2HCY20), Perodua D55L/Raizen (2HCY20), all-new Honda City 1.0 Turbo (2020), all-new Nissan Almera 1.0 turbo (2020).