by Xavier Kong
STRONGER sales from national car brands Proton and Perodua have propped up the national total industry volume (TIV), with a total of 40,000 units sold in February.
However, AmInvestment Bank and Affin Hwang Capital are slashing their 2020 TIV forecasts, pointing to slower consumer discretionary spending on big-ticket items due to the Covid-19 outbreak, which has resulted in macroeconomic uncertainties.
“We expect non-national carmakers to be impacted more than national marques due to a reduced propensity to purchase pricier and more premium products in the midst of current uncertainties,” said AmInvest analyst Jeremie Yap.
Affin Hwang’s Brian Yeoh concurred, noting an expectation that March sales volume will be severely affected due to the Movement Control Order (MCO) – which has just been extended to April 14 – issued by Prime Minister Tan Sri Muhyiddin Yassin.
“In our view, Malaysians will also hold back on big-ticket items such as cars if the Covid-19 pandemic is prolonged,” noted Yeoh.
Meanwhile, the approval rate for loans on passenger cars stood at 63.5% in January, an increase of 9.7% from December, and higher than the average rate of 61.4% in 2019.
Both research houses maintained their neutral stances on the auto sector, with AmInvest noting that national marques will continue to prop up the sector, while foreign and premium car brands look bearish.
Proton and Perodua saw sales growth of 89% and 10% year-on-year (yoy) respectively, with Proton’s market share also surging to a 77-month high of 25%, thanks to its Saga and X70 models.
Perodua has also guided that it will be increasing its spending in investments for 2020 to almost double the amount spent in 2019, from RM569 mil to RM1.1 bil, with the increase to go towards plant modernisation, expansion as well as preparations for a new model, which AmInvest believes to be the Perodua D55L B-segment SUV.
However, for foreign marques, Honda saw issues with pricing approvals for the City, Jazz, and CR-V, leading to lower demand. This has been exacerbated by the upward price revision of between 5% to 9% due to changes in the tax structure for Honda’s CKD products. However, Honda holds on to third place in terms of market share after the two national marques with 9.4%.
Toyota saw a 15% yoy drop in sales as well, but this was due to the high base in 2019 due to the launch of its mainstay, the Vios 2019. UMW Holdings Bhd management highlighted that Toyota’s top three best-selling models for 2019 were the volume-driven Vios, Yaris and Hilux, which make up 82% of total sales. – March 25, 2020
