AT a time when the COVID-19 pandemic is wreaking havoc in the economy front, the six-month sales and services tax (SST) holiday extension comes as a strong catalyst for the local automotive industry.
Given that cars are big ticket items, the extension of the SST exemption till June this year is positive in (i) sustaining the sales momentum and (ii) quelling dissatisfaction/cancellations for late-deliveries due to supply chain disruption issues.
Moreover, Maybank IB Research expects the extension to bring much relief to certain marques (ie Proton) which faced setbacks from supply parts disruption in 2H 2020. A case in point is Proton’s much-hyped B-segment SUV X-50 model which was launched in 4Q 2020.
“Of the more than 30,000 bookings received since its launch in October, only a fraction (3,800 units) was delivered in 4Q 2020,” revealed analyst Liaw Thong Jung.
“A non-SST extension scenario would lead to rising dissatisfaction (higher average selling price) and the loss of goodwill.”
Maybank IB Research expects December 2020’s total industry volume (TIV) to be the highest for 2020 as consumers rushed to capitalise on the SST holidays and the various incentives/ rebates offered.
“The month-on-month growth will be driven mainly by the two main marques (Perodua; +9% to 25,000 units and Proton: +18% to 13,000 units) which would bring 2020’s TIV to 512,000-515,000 units (11M 2020: 455,000 units) in line with our estimate (508,000-515,000 units) but above the Malaysian Automotive Association 470,000 units,” projected the research house.
In essence, Maybank IB Research which retains its “positive” stance on the automotive sector expects 2021’s TIV to drive closer to 600,000 units (average 50,000 units/ month) in 2021, fuelled by the SST effect and new launches.
“Perodua will continue to head sales ahead of Proton,” opined Liaw. “The former will be spurred by the roll-out of its much anticipated compact SUV (D55L) in 2Q 2021 while the latter’s X-50 SUV model will provide a full-year impact to its overall sales.”
The research house expects these two ‘national’ marques to dominate over 60% of vehicle sales in Malaysia with Toyota and Honda continuing to compete for the No 1 spot in the non-national segment.
“Bermaz Auto Bhd is also eyeing another marque (after Peugeot) to add to its growing stable,” projected Maybank IB Research. “Securing that (touted to be Kia) will be considered a major feat.” – Jan 6, 2021
