Flat Dec 18 TIV; 12M18 Up 3.8% Yoy

Dec 2018 Total Industry Volume (TIV) came in flat at 48.2k units (- 0.2% mom, -12.0% yoy), as the advance purchases made during the tax holiday period (June-Aug 18) nibbled off the year-end sales spark. Nonetheless, the 12M18 TIV ended on a higher note at 598.7k units (+3.8% yoy), within our expectations. Notably, the 2018 TIV growth has put an end to two consecutive years of sales decline. We maintain our 2019 TIV sales assumption of 603k units (+0.7% yoy) and OVERWEIGHT rating for the sector.

Delay in New Car Launches Due to Slower New Car Pricing Approvals

According to a recent news article, the Malaysia Automotive Association said that government’s delay in approving new car models’ official pricing has caused a delay in numerous new car launches. While the matter is now being resolved, we gather that the delayed launches are not volume generative models (ie. Toyota Rush and selected Hyundai model) and is unlikely to cause a huge dent to auto companies under coverage. However, we believe this ongoing uncertainty may see consumers holding back from car purchases, which may dampen sales volume in 1Q19.

Proton Recovers, Perodua Dips; SUV Launches to Lift 2019 Sales

Proton chalked up sales of 5.6k units (+16.1% mom, +16.6% yoy) in Dec 18, pushing cumulative 2018 sales to 64.7k units (-8.8% yoy). Perodua, on the other hand, registered lower sales of 18.4k units (-12.8% mom, -8.8% yoy), bringing cumulative 2018 sales to 227.2k units (+10.9% yoy). The encouraging response for the all-new Proton SUV X70 (launched in Dec 2018) and the upcoming all-new Perodua SUV Aruz (launched in Jan 2019) will likely boost sales/market share for the local brands in the coming months. Local marques 12M18-market share stood at 48.8% (vs. 12M17-market share of 47.8%).

Non-national Carmakers Marches on

The non-national carmakers continued to lead the Malaysian auto market for the seventh month – 12M18-market share was at 51.2%. Most Japanese marques experienced a mom improvement in Dec 18 – Honda sales at 8.0k units (+13.0% mom), Toyota at 4.3k units (+11.2% mom) and Nissan at 2.5k units (+23.0% mom) except for Mazda at 1.5k units (-23.2% mom, due to the high base effect).

We believe the facelifted Honda HR-V (launched in Jan 19) and Toyota’s new model line-up (Rush, Camry, Vios, Yaris) will likely attract market interest/sales in 2019. For the premium marques, 12M18 sales volume grew by 11.3% to 26.7k units, contributed by higher sales volume from Mercedes-Benz (+9.1% yoy) and BMW/Mini (+13.6% yoy) respectively.

Source: Affin Hwang Research - 18 Jan 2019