Automotive sector’s TIV YTD surpasses forecast growth

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KUCHING: The automotive sector’s total industry volume (TIV) year to date (YTD) has surpassed analysts’ forecast growth and there is now a high possibility of further upsides to their targets.

According to the research arm of MIDF Amanah Investment Bank Bhd (MIDF Research), the sector’s TIV of  384,734 units YTD (August 2017) grew 3.9 per cent year-on-year (y-o-y).

This was still well above MIDF Research’s forecasted growth of 2.7 per cent y-o-y (596,000 units).

The research arm saw possibilities of further upside to its target but this would highly depend on the build-up to the year-end sales campaigns.

“Toyota launched four facelift models and additional variants for the Vios, Camry, Fortuner, Hilux and Innova, mostly in September 2017,” MIDF Research said.

“Mazda is expected to launch its new generation CX5 within the next two weeks (most of the numbers to trickle in from October) while a big launch, we think, would be Perodua’s new MyVi in the fourthe quarter of 2017 (4Q17).”

It added that these launches could stimulate further strength into the 4Q17.

MIDF Research’s recent round of meetings with the auto players as well as ground checks suggested that most companies are rolling back rebates.

The research arm’s chat with Toyota dealers in town suggested distributor rebates have reduced by 30 per cent-50 per cent while Tan Chong Motor Holdings Bhd (Tan Chong Motor) is also looking to reduce rebates for its models in return for longer warranty period (from three years to seven years).

“Distributor rebates come direct from the distributors such as UMW Toyota or Tan Chong Motor whereas dealership rebates usually come out of the dealers’ (third parties) own pockets,” the research arm said.

It noted that Bermaz Auto Bhd meanwhile, is in fact raising pricing for the new CX5 by up to six per cent. The CX5 accounts for 30 per cent to 40 per cent of Mazda TIV.