Both national carmakers continued to perform well
Proton’s Aug20 sales volume rose by 25% yoy to 62k units (-14% mom), with 8M20 sales volume of 62k units (+1% yoy). Proton is expected to launch the X50 SUV in Oct20, and targets to sell 4k units for 2020, which we think is achievable given that the all-new B-segment SUV has received >10k bookings. Meanwhile, Perodua’s performance was also commendable – Aug20 sales rose by 13% yoy to 23k units (- 3% mom), led by healthy demand for its existing Perodua line-up, maintaining its dominant position with a 42% market share (8M19: 40.6%). Overall, the national’s combined 8M20 market share stood firm at 63.7% (vs 8M19: 56%).
Mixed performance for the non-nationals
Performance for the Japanese brands were mixed in Aug20, with Mazda (+20% yoy, thanks to the extended warranty/service maintenance) and Toyota (+3% yoy) leading the pack, whereas Honda (-25% yoy) and Nissan (-42% yoy) were the laggards. However, we believe the latter two brands should see better sales volume in the remaining months as Honda and Nissan are expected to launch the Honda City and Nissan Almera in 4Q20. We are unable to ascertain the sales performance for BMW/Mini, Mercedes-Benz and Scania as these carmakers would only disclose their sales volumes on a quarterly basis.
Maintain OVERWEIGHT
Our 2020E TIV forecast remains unchanged at 465k units (-23% yoy), as we expect cheaper SST exempted car prices to support sales in the coming months. Sime Darby Sime; RM2.30, BUY) is our preferred sector and country pick. Sime is a good proxy to regional recovery - we anticipate the higher equipment deliveries and parts sales from Australasia and China as well as catch-up spending from affluent consumers will boost luxury car sales in China and Malaysia. Given our BUY rating for large-cap, Sime Darby, we keep our Overweight on the sector. Downside risks could come from: i) a prolonged tightening of auto financing hindering the borrowing ability of car buyers; ii) exchange rate risk; and iii) a slowdown in the economy.
Source: Affin Hwang Research - 22 Sept 2020
Created by kltrader | Jan 03, 2023
Created by kltrader | Sep 30, 2022