According to the Malaysian Automotive Association (MAA), TIV for February 2022 registered at 43,722 units (+8% MoM, +1% YoY). Sales performance was stronger MoM and YoY as automakers ramped up production to fulfil back-logged orders before the expiry of sales tax exemption by end-June 2022. Overall, the chip supply shortage is still capping production at certain volume limit per month. Automakers are currently diverting their chip supply towards popular models to meet back-logged demand (stretching up to 6 months for certain models). Sales for March 2022 are expected to overtake February 2022 on a longer working month and companies with financial year ending 31 March 2021 speeding up sales towards the month-end. Maintain NEUTRAL with 2022 TIV target of 600k units (+18%) which is in line with MAA’s 2022 TIV target. SST-exemption is still on-going until June 2022, with slew of new launches ahead (including models launches that were postponed from 2021).

TIV for February 2022 registered at 43,722 units (+8% MoM, +1% YoY). Sales performance was stronger both MoM and YoY as automakers ramped up production to fulfil back-logged orders before the expiry of sales tax exemption by end-June 2022. Overall, the chip supply shortage is still capping production at certain volume limit per month. Automakers are currently diverting their chip supply towards popular models to meet back-logged demand (stretching up to 6 months for certain models). Sales for March 2022 are expected to overtake February 2022 on a longer working month and companies with financial year ending 31 March 2021 speeding up sales towards the month-end.

A detailed look at the passenger vehicles segment (+15% MoM, +1% YoY). The best performer MoM is Proton (+109% MoM, -23% YoY) with stronger recovery after the limited production capacity in the previous months and ramped production to fulfil back-logged orders which stretched up to 6 month for certain models. Overall, its sales were from the all-new X70 and X50 (4,065 units sold making up 45% of sales), and supported by the face-lifted Persona, Iriz, Exora and Saga (collectively known as PIES). On the other hand, most of the industry YoY growth came from Toyota (-5% MoM, +63% YoY)’s sales, mostly from its exceptional top models namely all-new Toyota Vios, Yaris, and Toyota Hilux, while Honda (+56% MoM, +37% YoY)’s sales were mostly from City, Civic and BR-V with exceptional response for the all-new City and all-new City Hatchback. Perodua (0% MoM, +5% YoY) drove stronger on delivery of the face-lifted MyVi which was launched on 18th November 2021 with its overall sales driven by the all-new Axia, Myvi, Bezza, and ARUZ and Ativa (3,902 units sold at 22% of sales). Mazda (-46% MoM, -35% YoY)’s sales were mostly contributed by the face-lifted CX-5 and all-new CX-8. Nissan (-22% MoM, -24% YoY)’s all-new Almera has started to propel growth for the brand, but overall growth still lagged behind other marques from the dearth of all-new model launches.

Maintain NEUTRAL with 2022 TIV target of 600k units (+18%). With the re-opening of economic activities, and further driven by the 100% sales tax exemption on CKD passenger vehicles and 50% on CBU including SUV and MPV for six months until end-Jun 2022, we expect buoyant recovery in car sales especially as evident from the growing number of back-logged bookings for popular models (up to 6 months) and stream of new models launches in 2022 (including models launches that were postponed from 2021). Additionally, Battery Electric Vehicles (BEVs) new launches are expected to be boosted by the full exemption on import & excise duties, sales tax, road tax, and individual tax relief of up to RM2,500 for the costs of purchase and installation; as well as rental and subscription fees of EV charging facilities up to 31st December 2025 (for CKD, CBU up to 2023) to support development of the local EV industry. Nevertheless, for certain models, the recovery of car production could be limited by the on-going global constraint in semiconductor chips supply. Automakers have prioritized usage of such resources, diverting any precious semiconductors they have to their most profitable vehicles such as full-size trucks and SUVs, as well as luxury vehicles. Our 2022 TIV target at 600k units (+18%) is in line with MAA’s 2022 TIV target.

Source: Kenanga Research - 23 Mar 2022