Maintain “neutral”. Total industry volume (TIV) for September reported lower sales of 47,771 units or down 6.6% on a month-on-month (m-o-m) basis. The year-on-year (y-o-y) figure was down by 13.1%.
The decreased TIV growth was mainly due to a decline in the passenger segment which fell by 14.5% y-o-y and 7.8% m-o-m. Nonetheless, year-to-date (YTD) TIV was higher by 0.9% y-o-y at 492,305 units, which was within our expectations and that of the Malaysian Automotive Association (MAA) of 660,000 and 680,000 units respectively.
Lower September sales came mainly from the national marques as buyers held off from purchasing in anticipation of new launches for the A/B-segment Proton Iriz in end-September and A-segment Perodua Axia in mid-September.
Additionally, the industry is also facing consumer conservatism in car purchases due to the overhanging economic uncertainties attributed to measures to control household debts and the upcoming goods and services tax implementation. The recent increases in the price of RON95 and diesel by 20 sen further solidify consumer pessimism.
The national car segment was down by 13.1% m-o-m to 20,167 units in September with declined sales for both Perodua and Proton at 16.9% and 6.5% m-o-m respectively.
The Perodua market share decreased in September to 29% from 33% while Proton remained the same at 19%. To date, the Perodua Axia has recorded more than 32,000 orders, while Proton Iriz recorded 17,000 orders.
Due to the tremendous response to the all-new Perodua Axia and Proton Iriz, we believe it will help increase TIV figures.
The non-national car segment decreased by 2.2% m-o-m. Sales of Japanese marques declined by 3.4% m-o-m while sales of continental marques increased by 11.3% m-o-m.
Leading the decline were Honda and Toyota where sales dropped by 7.8% m-o-m and 3.2% m-o-m respectively. On the positive side, Nissan saw a rebound from a low base with sales growth of 7.3% m-o-m.
We maintain “neutral” for UMW Holdings Bhd with target price (TP) of RM12.19, “neutral” for Tan Chong Motor Holdings Bhd with a TP of RM4.88 and “neutral” for MBM Resources Bhd with a TP of RM2.64. — BIMB Securities Research, Oct 27
This article first appeared in The Edge Financial Daily, on October 28, 2014.