The total industry volume (TIV) in May registered a drop of 15% YoY and 5% MoM to 49,634 units. As expected, the drop was due to the wait-and-see approach adopted by consumers on expectations of lower car prices after the general election. For the YTD, the 5MCY13 TIV grew 6% YoY to 259,857 units, making up 41% of both ours and the Malaysian Automotive Association’s (MAA) 2013 forecasts of 641,560 and 640,000 units respectively. Meanwhile, the YTD total industry production (TIP) registered a slight growth of 5% to 244,079 units. YoY, the main marques, except for Honda and Nissan, recorded a decrease in passenger vehicle sales in May. Similarly, commercial units did poorly with sales of only 6,236 units, a drop of 8% YoY and 10% MoM. We believe consumer expectations on significant price reductions will gradually moderate post the general election. We also reckon that the TIV will trend higher in the months ahead amid the gradual price reductions in the industry. The upcoming revised National Automotive Policy (NAP), which we believe will focus mainly on positioning the country as a regional hub for hybrid vehicles and energy-efficient vehicles (EEV), should be positive for all the auto players, especially DRB-Hicom (MP, TP: RM2.81) and UMW Holdings (MP, TP: RM14.07) as both will benefit from their partnerships and affiliations with foreign car makers. We are maintaining our Neutral stance for now while waiting for changes in structural issues (such as excise duties, selling prices, non-tariff barriers, fuel subsidies) in the revised NAP to be announced.
Sales slowed for the second consecutive month. Total vehicle sales (TIV) in May registered a drop of 15% YoY and 5% MoM to 49,634 units on the back of lower sales of passenger vehicles (-16% YoY and -5% MoM to 43,398 units) and commercial vehicles (-8% YoY and -10% MoM to 6,236 units). This came as no surprise to us as we believe that the consumers were adopting a waitand-see approach on expectations of lower car prices post the general election. On a YTD basis, the 5MCY13 TIV grew by 6% YoY to 259,857 units, making up 41% of both ours and the Malaysian Automotive Association’s (MAA) 2013 forecasts of 641,560 and 640,000 units, respectively.
Production marginally higher on a YoY basis. May’s total industry production (TIP) merely inched up by 2% YoY to 47,301 as the decent production volume (7% YoY) in passenger vehicles was offset by a lower production volume (-30% YoY) in commercial vehicles. However, on a MoM basis, the TIP dropped by 7% on the back of lower production volumes in both passenger vehicles (-6% MoM) and commercial vehicles (-16% MoM). For the YTD, the TIP registered a growth of 5% to 244,079 units.
Sales analysis. On a YoY basis, the main marques, except for Honda and Nissan, recorded a decrease in passenger vehicle sales (-16%) in May. Of noteworthy was that Honda and Nissan’s sales jumped 6% and 40% to 3,400 and 3,056 respectively, likely due to the overwhelming sales of the Nissan Almera and Honda’s fourth generation CR-V. On a MoM basis, sales were generally lower for the main auto companies with the exception of Toyota and Honda. Toyota registered a 25% sales growth to 5,169 vehicle units while Honda sales increased by 5% to 3,400 units. For the YTD, passenger vehicle sales still grew by 6%. Sales for commercial units generally declined on a YoY and MoM basis with Hino being the only outperformer with total sales of 601 units, an improvement of 19% YoY and 7% MoM. On a YTD basis, the commercial vehicle sales still grew by 8%.
Outlook. According to MAA, June’s sales are expected to be slightly higher than May’s level due to the upcoming festive promotions. We believe that consumer expectations for significant price reductions will gradually moderate post the general election. Meanwhile, the TIV will likely trend higher in the months ahead amid gradual price reductions in the industry coupled with an attractive pipeline of new models. The upcoming revised National Automotive Policy (NAP), which we believe will focus mainly on positioning the country as a regional hub for hybrid vehicles and energyefficient vehicles (EEV), should be positive for all the auto players, especially DRB-Hicom (MP, TP: RM2.81) and UMW Holdings (MP, TP: RM14.07) as both will benefit from their partnerships and affiliations with foreign car makers, which can be developed into further tie-ups and collaborations.
Neutral on the sector. We are maintaining our Neutral stance for now while waiting for changes in the structural issues (such as excise duties, selling prices, non-tariff barriers, fuel subsidies) in the revised NAP to be announced.S
Source: Kenanga
Chart | Stock Name | Last | Change | Volume |
---|