According to the Malaysian Automotive Association (MAA), TIV for April 2022 registered at 56,213 units (- 23% MoM, -4% YoY). Sales performance was weaker both MoM and YoY due to chips shortage, delay in shipment for some players, and more orders being fulfilled a month earlier by companies having financial year ending 31 March 2022. Sales for May 2022 are expected to be maintained around April 2022 level with the shortened Hari Raya month with most of the workers expecting to take a longer leave after two years of pandemic amid persistent chips shortage and delay in component shipment. 4MCY22 TIV of 215,965 units (+8%) came in at 36% of our target, within expectation. Maintain NEUTRAL with 2022 TIV target of 600k units (+18%) which is in line with MAA’s 2022 TIV target.

TIV for April 2022 registered at 56,213 units (-23% MoM, -4% YoY). Sales performance was weaker both MoM and YoY due to chips shortage, delay in shipment that affect some players especially with the limited CBU units given by respective principals, and orders fulfilled a month earlier by companies having financial year ending 31 March 2022. Sales for May 2022 are expected to be maintained around April 2022 level with the shortened Hari Raya month, and as most of the workers are expected to take a longer leave after two years of pandemic amid persistent shortage in chips and component shipment delay. Overall, the demand is still strong as SST-exemption period is scheduled to end in June 2022. (MAA has proposed for extension to December 2022 and is still waiting for government’s feedback).

A detailed look at the passenger vehicles segment (-24% MoM, -6% YoY). Perodua (-4% MoM, +26% YoY) drove on the face-lifted MyVi which was launched on 18th November 2021, and supported by the all-new Axia, Myvi, Bezza, and ARUZ and Ativa (5,698 SUV units sold at 22% of sales). Nissan (-17% MoM, -25% YoY)’s all-new Almera has started to propel growth for the brand especially Nissan being one of the brand that have sufficient supply during this chip shortage situation. Mazda (-18% MoM, +13% YoY) drove their sales by leveraging on fresh shipment of CBU units which was earlier delayed due limited supply from its Japanese principal. Mazda sales were mostly contributed by the face-lifted CX-5 and all-new CX-8. Toyota (-24% MoM, -37% YoY)’s sales were mostly from its exceptional top models namely all-new Toyota Vios, Yaris, and Toyota Hilux. Proton (- 31% MoM, -43% YoY)’s sales were from the all-new X70 and X50 (2,892 units sold making up 34% of sales), and supported by the face-lifted Persona, Iriz, Exora and Saga (collectively known as PIES). Honda (-43% MoM, +12% YoY) suffered the worst during the month from severe shortage of parts and sighting of all-new HR-V spark some enthusiasm to held back purchase for the new model. Overall, sales were mostly from City, Civic and BR-V with exceptional response for the all-new City and all-new City Hatchback.

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% similar exemption on CBU including SUV and MPV until end-Jun 2022, we expect buoyant recovery in car sales 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 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. Malaysian Automotive Association (MAA) are currently vying for further SST exemption extension to end-2022 as the current chip shortages are limiting automakers’ ability to maximise production capacity to meet back-logged demand which stretched up to six months for certain models. Our 2022 TIV target at 600k units (+18%) is in line with MAA’s 2022 TIV target.

Source: Kenanga Research - 24 May 2022