TIV Continues to Decline in February

According to the Malaysian Automotive Association (MAA), the monthly Total Industry Volume (TIV) in February continues to be in a downtrend attributed to seasonal factors such as shorter working months due to the Chinese New Year festive holidays. TIV declined 4.1% MoM and 1.1% YoY to 62.8k units.

The passenger vehicle segment decreased by 2.4% MoM to 58.0k units, while the commercial car segment also plunged by 20.5% MoM to 4.9k units (refer to Figure 1). YTD, TIV stood at 128.3k units (+12.8% YoY) driven by the passenger car segment with 117.3k units (+16.2% YoY). While for the commercial vehicle segment, it has weakened by 13.8% YoY to 11.0k units.

TIV Expected to Pick Up in March

MAA expects TIV to be higher in March, mainly driven by i) the rush for deliveries by companies having their FYE 31 March, and ii) Hari Raya festive season promotional campaigns.

National Car Marques Had Mixed Results

Perodua registered a lower sales volume of 27.3k units (-8.0% MoM) in February while Proton registered a higher volume of 13.3k units (+3.8% MoM). YTD, Perodua registered a growth of 22.9% on a YoY basis to 57.0k units while Proton at 26.0k units (+2.4% YoY). The combined market share of national cars increased to 65% compared with 63% in the same period last year.

Non-National Car Sales Improved

The higher car sales volume from Toyota (+42.9% MoM to 5.4k units) and Mazda (+34.6% MoM to 1.7k units) have helped to offset lower sales volume from other non-national car brands. Volkswagen’s sales volume dropped by 33.8% MoM to 102 units, while Honda and Nissan were lowered by 846 units and 114 units to 6.2k units and 481 units, respectively. Overall, the non-national car brands segment has registered a higher TIV of 17.4k units (+2.8% MoM). YTD, the sales increased by 17.4% YoY to 34.3k units.

Maintain Neutral

We reiterate our Neutral recommendation for the sector. After another record-breaking year in 2023, we expect the automotive sector to normalise in 2024 and register a weaker TIV of 650k units (-18.7% YoY) due to the absence of tax incentives and depleting order book. Maintained SELL on MBMR (TP: RM4.13) and BAuto (TP: RM2.33) while SIME (TP: RM2.84) remained as BUY.

Source: TA Research - 22 Mar 2024