According to the Malaysian Automotive Association (MAA), TIV for August 2021 registered 17,500 units (+147% MoM%, -67% YoY). There was significant improvement in MoM growth with the re-opening of economic activities including sales and production for motor vehicles starting 13th August 2021 especially for key states of Selangor and Kuala Lumpur, but YoY sales were still recovering from nationwide lockdown which lasted up to 12th August 2021. Sales in September 2021 is expected to be higher than August 2021 level with the growing number of back-logged booking for the popular models, with businesses for most industries including automotive sector already resumed albeit at various levels depending on vaccination rate and SOP, while supported by continuous on-going efforts by car companies to boost sales. 8MCY21 TIV recorded 273,757 units (-4%), within our expectation at 60% of our 2021 TIV target of 460k units (-13%). Driving forward, we pegged our 2022 TIV target at 600k units (+30%), closely in line with MAA’s TIV target of 605k units (+21%). Our 2022 TIV growth will be driven by the expected recovery in economy post lockdown and the assumption that herd immunity would be achieved by then, inevitably resulting in relaxation of SOPs toward revitalising local travel which should push demand for passenger vehicles especially the affordable national marques. Additionally, a few automakers have assured commitment to absorb SST beyond Dec 2021. Maintain NEUTRAL.

TIV for August 2021 registered 17,500 units (+147% MoM%, -67% YoY). There was significant improvement in MoM growth with the re-opening of economic activities including sales and production for motor vehicles starting 13th August 2021 especially for key states of Selangor and Kuala Lumpur, but YoY sales were still recovering from nationwide lockdown which lasted up to 12th August 2021. Sales in September 2021 is expected to be higher than August 2021 level with the growing number of back-logged booking for the popular models (stretching up to 3 months for certain models), with businesses for most industries including automotive sector already resumed albeit at various levels depending on vaccination rate and SOP, while supported by continuous on-going efforts by car companies to boost sales. Nevertheless, some makes are still affected by the global shortage of chips especially due to lockdown in certain countries.

A detailed look at the passenger vehicles segment (+204% MoM, -69% YoY). Perodua (+967% MoM, -69% YoY)’s sales were driven by the all-new Axia, Myvi, Bezza, and ARUZ and Ativa (1,590 units sold at 23% of sales) with the strongest recovery compared to other marques from a lower base last month. Proton (+44% MoM, -76% YoY)’s sales were due to the all-new X70 and X50 (836 units sold at 30% of sales), and supported by the face-lifted Persona, Iriz, Exora and Saga (collective known as PIES). Honda (+141% MoM, -75% YoY)’s sales mostly came from City, Civic and BR-V with exceptional response for the all-new City. Toyota (+138% MoM, -51% YoY)’s sales mostly came from its top models namely all-new Toyota Vios, Yaris, and Toyota Hilux. Nissan (+144% MoM, -72% YoY)’s all-new Almera has started to propel positive growth for the brand, but overall growth still lagged behind other marques from the dearth of all-new model launches. Mazda (+252% MoM, -42% YoY)’s sales were mostly contributed by the face-lifted CX-5 and allnew CX-8.

Maintain NEUTRAL with unchanged 2021 TIV target at 460k units (-13%) but we expect a strong recovery next year with 2022 TIV target of 600k units (+30%). With the re-opening of economic activities including sales and production for motor vehicles under National Recovery Plan Phase 1 starting 13th August 2021 especially for key states of Selangor and Kuala Lumpur, we expect buoyant recovery in car sales especially with the growing number of back-logged booking for the popular models. We keep our 2021 TIV target at 460k units (-13%) tracking behind MAA’s 2021 target TIV of 500k units. We expect a stronger recovery next year with 2022 TIV target at 600k units (+30%), closely in line with MAA’s TIV target of 605k units (+21%). Our 2022 TIV growth will be driven by the expected recovery in economy post lockdown and the assumption that herd immunity would be achieved by then, inevitably resulting in relaxation of SOPs toward revitalising local travel which should push demand for passenger vehicles especially the affordable national marques. Additionally, a few automakers have assured commitment to absorb SST beyond Dec 2021.

Source: Kenanga Research - 23 Sept 2021