MAA’s Dec 2013 data showed strong year-end TIV of 60.5k (+0.0% yoy; +15.8% mom) on heavy discounts and promotions to boost year-end sales (at the expense of margin). 2013 TIV increased by 4.47% yoy to yet another record (vs. our projection of +3.5% yoy), while we expect 2014 TIV to increase by +3.5% yoy as OEMs launches new models and aggressive campaigns to capture market share ahead of GST implementation. 

Perodua (UMW and MBM) achieved 196.1k sales (+3.7% yoy) in 2013, beating its targeted 194k sales, on its successful S-Series. Perodua is conservatively targeting sales of 197k in 2014 (+0.5% yoy), on the back of Alza facelift and new Viva replacement model by 2H14, in line with the commencement of new manufacturing plant.

Proton (DRB) market share slides to 21.2% as sales dropped 1.7% yoy to 138.8k units in 2013. Proton is expected to launch GSC model by 2Q14, new hybrid model by end 2014, and EV model by 2015. All the models are targeted for export market.

Toyota (UMW) sales dropped 13.3% yoy to 91.2k units in 2013 due to delayed launch of new Vios. UMW is targeting 96k sales (including Lexus) in 2014 (+3.3% yoy), with full year impact from the new Vios, newly launched Altis and potentially CKD Camry Hybrid by year end.

Honda (DRB) recovered strongly with 51.5k sales (+47.5% yoy) and market share of 7.9% in 2013. Honda has set an aggressive target of 76k sales (+47.4% yoy) in 2014, banking on new models. It has launched its second production line (doubling capacity to 100k units/annum) for small and hybrid cars.

 

Nissan (TCM) sales spiked up to 53.2k units (+46.6% yoy) in 2013 due to strong Almera sales. Nissan is targeting 60k sales (+12.9% yoy) in 2014, from new model Sylphy and Teana and CKD Serena MPV Hybrid.

 

Other marques reported relatively stable combined market share at 19.1% in 2013 (vs. 19.3% in 2012), driven mainly by Isuzu (DRB), Ford (Sime Darby) and Mazda (BAuto). 

• Slowdown in the Malaysian economy.
• Global automotive supply chain disruption.
• Increase cost of living, impacting consumer confidence. #p#Sudden jump in fuel prices and interest rate. 

Neutral

 

Positives :

Negatives :

Top Pick: Maintain BUY on DRB (TP: RM3.38) and MBM (TP: RM4.52)