KUCHING: Analysts expects the automotive sector to take a breather next year, with a marginal total industry volume (TIV) growth of 670,000 units in 2015 – a mere increase by 0.3 per cent from this year’s volume.
The easing growth, compared to prior years, largely reflects the potential impact on disposable income under the new consumption tax and subsidy structure, says MIDF Amanah Investment Bank Bhd (MIDF Research).
“We are not expecting a contraction in TIV given that Malaysia’s economic outlook is still positive with GDP growth expected to be in a range of between five to six per cent for FY15,” it added.
“We also expect demand for new vehicles to be decent on full year contribution from key models launched in FY14 such as the Perodua Axia, Proton Iriz, Mazda 3, Nissan Sylphy, Nissan Teana, Toyota Altis, Honda City and Honda Jazz, to name a few.”
MIDF Research also expects buying interest to sustain with new model launches in FY15 in the passenger car category (Perodua Myvi facelift, Mazda 2, Mazda 3 CKD, and Mazda 6 CKD) as well as sports utility vehicle or 4-wheel drives (Nissan X-Trail, Honda HR-V, Mazda CX-3, Nissan Navara, Mitsubishi Triton, Toyota Vios facelift, Toyota Hilux, Toyota Innova, Toyota Fortuner, Toyota Camry facelift).
“The lower pump price may boost consumer sentiment.
We believe there could be some respite in consumer confidence lending support from the lower fuel pump price and relatively stable fiscal health of the country.”
Moreover, the recent removal of the fuel subsidy gave some anecdotal evidence of the still healthy purchasing power as some consumers took the opportunity to opt for the higher fuel grade RON97 as the price gap with the lower grade RON95 narrowed.
Looking at currency risks, the US dollar to ringgit rate spiked to as high as RM3.45 recently due to concerns over Malaysia’s fiscal health going into 2015 amidst the depressed crude oil price which was affirmed by Petronas’ dim profit outlook for FY15.
“We estimate that every one per cent change in US dollar to ringgit rate impacts the earnings of automotive companies under our coverage by two to five per cent.
On the flipside, the depressed yen is positive for some of the companies under our coverage,” said MIDF Research.
Researchers from TA Securities Holdings Bhd (TA Research) believe national car brands may gain back some market share in 2015.
To recap, both national car manufacturers, Proton and Perodua suffered a significant 9.5 per cent sales drop in the first 10 months of 2014.
Both manufacturers have been progressively losing their market shares to foreign marques since 2009.
“Year to date, the market share has declined from the high of 64.7 per cent in 2009 to year to date of 53.1 per cent.
We highlight that Proton’s sales volume has declined significantly, by 18 per cent.
“Nonetheless, we opine that some of the lost market share to foreign brands could be recouped in the months ahead due to the strong sales of Perodua’s 1st Energy Efficient Vehicle model, Perodua Axia.
As at Novewmber 24, Perodua Axia received 54,100 bookings and 16,400 have been delivered to customers.
“We believe the positive momentum will likely spill over into next year due to its competitive and attractive pricing, which will help Perodua to sustain its sales growth going forward.”