KUCHING: The Malaysian Automotive Association’s (MAA) total industry volume (TIV) numbers for May have garnered mixed views given that it was disappointing to some analysts.
According to the research arm of Hong Leong Investment Bank Bhd (HLIB Research), MAA reported disappointing number for May’s TIV of only 44,700 units (down 12.8 per cent year on year (y-o-y); up 5.9 per cent month on month (m-o-m)).
The association believed the figure was affected by the ongoing cautious consumer sentiments (especially on big item purchase) as well as consumers holding back purchases in anticipation of new model launches.
HLIB Research noted that year to date (YTD), sales dropped by 17.6 per cent y-o-y, due to high base effect as well as weak consumer sentiment.
The research arm maintained its 2016 TIV assumption of 613,400 units (down eight per cent y-o-y), as it expected stronger sales in the second half of 2016 (2H16) with new model launches.
Meanwhile, the research arm of MIDF Amanah Investment Bank Bhd (MIDF Research) noted that May 2016 total industry volume (TIV) registered a five per cent m-o-m increase to 44,316 units, but noted that this is still a 14 per cent y-o-y contraction.
“Demand remains weak with little waiting list except for recently launched models such as the new Hilux, CX5 facelift and the new Perdana, while sales are still heavily incentivised.
“The slower sales also reflect the numerous price hikes implemented by all key players in the first four months of the year.
“June sales could strengthen further sequentially driven by pre-festive (Raya Aidilfitri) buying and the recent new Perdana launch by Proton,” MIDF Research said.
HLIB Research highlighted that Perodua (UMW and MBM) controlled the largest market share at 34.1 per cent in May, with sales of 15,200 units, due to strong demand for Axia, which was partially offset by the weaker demand for MyVi.
The research arm noted that the launch of new sedan model in 2H16 is expected to improve Perodua sales and achieve its target of 200,000 sales for 2016.
As for Proton (DRB and MBM), HLIB Research said that sales remained weak in May with 5,100 units due to weak consumer sentiments, lack of new models as well as consumers holding back of purchases pending new model launches.
“Proton has recently launched new Perdana to improve its branding while upcoming Persona, Saga and Ertiqa are expected to improve its sales in 2H16,” the research arm added.
MIDF Research highlighted that Proton has a sales target of 3,000 units by year end for the new Perdana (average 400-500 incremental units a month).
Booking in hand is around 900 units and the research arm expected these to be delivered within the next two months.
“However, the Perdana comes with a production cap of 7,000 units per annum (580 per month) based on the collaboration agreement with Honda, meaning any positive from incremental volume will be limited.
“Nonetheless, the big kicker for Proton is expected to come from the Persona Replacement (estimated monthly sales of circa 1,200-1500 units per month), the Saga replacement and a new Suzuki-based model, targeted to be launched by year end,” the research arm said.
HLIB Research noted that within the foreign segment, Toyota (UMW) reclaimed its top spot with 6,100 sales attributed to sales of newly launched Hilux model.
The research arm further noted that the reduced target of 80,000 units (from 85,000) is still relatively tall for Toyota to achieve despite upcoming new launches of new Innova and upgraded Vios.
MIDF Research observed that Toyota regained its crown (from Honda) as the largest non-national in May, as well as the second largest player in the industry after Perodua.
“A key driver for this is the launch of the new Hilux in early May,” it said.
MIDF Research’s checks with management recently suggested a booking backlog of 4,000 units for the model, equivalent to 1.5 months waiting list and more importantly, is larger than even Toyota’s YTD average monthly TIV of 3,576 units.
It said that the Hilux is historically Toyota’s second largest volume driver accounting for approximately 30 per cent of Toyota TIV.
“Having said that, Honda’s recent launch of the new Civic could cap Toyota’s latest market share gain,” the research arm added.