Bermaz charges ahead as Mazda bookings pile up

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KUCHING (July 4): Bookings for Mazda cars under the purview of Bermaz Auto Bhd (Bermaz Auto) has shot through the roof since the Ministry of Finance’s announcement of the vehicle Sales and Services Tax (SST) exemption expired on June 30, 2022.

MIDF Amanah Investment Bank Bhd (MIDF Research) gathered that daily bookings for Bermaz Auto’s Mazda franchise shot up to 150 units per day compared to the usual 30 to 40 units a day.

“Outstanding bookings for Mazda now stand at around 10,000 units from 8,500 previously with a 70:30 split between completely knocked down (CKD) and completely built up (CBU) models,” it said in its analysis yesterday on the company.

“This order bank should last the group till March 2023. Meanwhile, Peugeot is sitting on outstanding bookings of more than 600 units while Kia has outstanding bookings of close to 700 units.

“The strong booking bank should provide good topline visibility for the group till early next year.”

With such an order backlog, RHB Investment Bank Bhd (RHB Research) suspects that it could take Berjaya Auto seven months or more to fulfil most orders.

“We gleaned that, lately, it has been getting insufficient CKD kits from its principal in Japan, as the impact from China’s lockdown starts to flow through,” RHB Research forewarned in its own notes.

“That said, the company is still fairly confident that it can fulfil most CKD backlog orders before March 31, 2023.

We lift FY23-25F ASPs due to higher car prices, and FY23 Mazda sales volumes to account for its current strong backlog orders. However, we also trim FY24 and FY25 units sold to account for the dampened demand – as a result of higher car prices and cost of living.”

MIDF Research believed the next kicker for Bermaz Auto will be the local assembly of the CX30 model, which is expected to commence in December. The CKD CX30 will be third Mazda CKD model after the CX5 and CX8.

“The CX30 is currently one of the best-selling CBU model for the group, generating volume of 666 units in FY22,” the research firm added. “Given duty savings from local assembly, we expect the CKD CX30 to be priced meaningfully lower than the CBU variants.

Bermaz Auto is targeting volumes of 4,000 to 4,500 per annum for the CKD CX30, which could expand Mazda TIV by an estimated 19 per cent annually.”

The introduction of the CKD CX30 is also timely to buffer any potential demand weakness once SST-exempted bookings are exhausted by March 2023, in MIDF Research’s opinion.

Meanwhile, Kia’s maiden CKD model, the Carnival is expected to be rolled out within 3Q22. The CKD variant is expected to come in 7 and 8-seater configurations.

Combined with the existing CBU variant, the group is targeting monthly volumes of 180 to 200 units. The second CKD model is the Sorento (7-seater SUV) expected to be rolled out in 4QCY22.

For the domestic market, Bermaz Auto is targeting conservative volumes of circa 150 units per month. The majority of the expected 2,000 to 3,000 a month local production of the Sorento will be exported to overseas markets in Thailand, Philippines and Indonesia.

As it is, the 11-seater CBU Carnival, which is currently Dinamikjaya Sdn Bhd’s (DJMSB) sole model in the market generated volumes of an average 68 units per month, while outstanding bookings stand at around 700 units.

With at least 1,000 units of the CBU Carnival expected to arrive by year-end, Bermaz Auto expects to be able to meet the stretched order backlog before the March 2023 deadline.

For the Peugeot brand, the new Landtrek pick-up truck is slated for introduction soon. The model is expected to be a CBU imported from China with a potential price tag of RM125,000. Volumes are expected to range between 150 to 200 units per annum.

Inclusive of full year contribution from the new Peugeot 2008 (small SUV) which was launched in January 2022, BAuto is targeting the Peugeot brand to generate sales volume of 2,200 to 2,500 in FY23, representing a 128 to 159 per cent growth against FY22 sales of 964 units.

Like DJMSB, 55 per cent-owned Bermaz Auto Alliance Sdn Bhd (BAASB) (housing Peugeot distribution operations) entails cost sharing with the BAuto group which enables very low break-even volume of less than 80 to 90 units per month.