MAYBANK IB Research has turned bullish on the automotive sector by upping its 2020 total industry volume (TIV) by 6-9% to 508,000-515,000 units on expectation of a stronger 4Q CY2020 vehicle sales outlook.
The research house expects October-December vehicle sales to average 55,000-58,000 units/ month, underpinned by the various launches and the ongoing zero sales and service tax (SST) incentives.
“We will be monitoring three key features in the upcoming Budget 2021, namely (i) SST policy, (ii) EV framework, and (iii) M&A incentives,” wrote analyst Liaw Thong Jung in a sector update.
“Among these, extending the zero SST will gain the most traction in the market.”
September’s TIV of 56,400 units (+7% month-on-month; +26% year-on-year) took 3Q CY2020/ 9M CY 2020 vehicle sales to 166,800 units (+14% yoy)/ 341,500 units (-23% yoy), which accounted for (i) 71-71% of Maybank IB Research’s initial 455,000-480,000 full year units estimates and (ii) 73% of the Malaysian Automotive Association’s 470,000 units forecast.
“Following the quick release of selected marques, sales figures for October, namely (i) Perodua (+7% mom to 26,900 units), and (ii) Proton (-5% mom to 11,400 units), we have raised our 2020 TIV estimates to 508,000-515,000 units,” justified Liaw.
The research house expects a strong finish to 4Q CY2020 given consumers are inundated with (i) multiple launches with new & facelift models in the B-segment (Proton X-50, Hyundai Kona, Honda City, Toyota Yaris) and (ii) annual year-end incentives/rebates.
“Notwithstanding that, buyers will accelerate their purchases in 4Q CY2020, capitalising on the zero-SST incentive which will end by December.” Liaw pointed out.
“We now expect 4Q CY2020’s TIV to average 55,000-58,000 units/ month for the October-December period.”
Of particular interest, the highly anticipated Proton SUV X-50 model which was recently launched will be among the sector’s key sales driver in 4Q CY2020.
The first national automaker saw 27,400 bookings for its X-50 since but with only 447 units delivered to-date. – Nov 4, 2020
