Friday 29 Mar 2024
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KUALA LUMPUR (Dec 19): Affin Hwang Investment Bank Bhd has raised its total automotive industry sales volume (TIV) forecast for 2018 to 600,000 units from 594,000 units, on anticipated higher sales volume for December 2018, driven by new model launches and the year-end promotional campaigns.

In a sector update today, its analyst Brian Yeoh said most carmakers are already close to their 2018 year-end targets, unlike last year, hence they are implementing their usual year-end promotions only in December.

Yeoh noted that November sales was slightly weaker by 1.8% year-on-year (y-o-y) due to the heavy year-end promotions done early in the second half of 2017 to meet the full-year sales target.

All in, TIV for the cumulative 11 months of 2018 (11M18) stood at 550,500 units, he said.

Perodua, with 11M18 sales of 208,800 units, could "certainly exceed" its 2018 sales target of 209,000 units, said Yeoh, noting that Perodua remains as the market leader with an 11M18-market share of 37.9%.

Going forward, Yeoh is expecting Proton's all-new X70 to drive the 2019 sales volume. "With over 10,000 bookings for the all-new Proton X70 launched on Dec 12, 2018, coupled by the zero sales and service tax (SST) pricing policy and year-end promotions, we think Proton's sales volume will likely improve in the coming months," said Yeoh.

On the other hand, Yeoh noted that non-national carmakers dominate the Malaysian auto arena for the sixth month — Mazda, with 11M18-market share at 51.3%, continued to shine for the fifth consecutive month, achieving another strong monthly sale of 1,900 units in November, which is only 59 units less than the tax holiday high in August.

"We believe Mazda's sales momentum will remain healthy, considering the order backlog of circa 3,000 units," said Yeoh.

Meanwhile, European carmakers' 11M18 sales volume grew by 12.6% y-o-y to 24,400 units, led by higher sales volume from Mercedes-Benz (10.2% y-o-y) and BMW (15.1% y-o-y) respectively, said Yeoh.

Maintaining an "overweight" rating on the sector, Yeoh expects the sector earnings to remain healthy amid top-line growth and sustained strength of the ringgit.

"For sector picks, we prefer Toyota (UMW Holdings Bhd), Mazda (Bermaz Auto Bhd) and Perodua (UMW Holdings/MBM Resources Bhd)," said Yeoh.

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