KUALA LUMPUR: Automotive sector earnings are expected to recover amid top-line growth and the sustained strength of the ringgit, says Affin Hwang Capital Research.
The research house is overweight on the sector given its performance in the 10 months to Oct 31, which was 6.2% higher from the previous-year period.
Total industry volume in the Malaysian automotive industry came in at 47,300 units in October 2018, which was a notable 51.2% recovery from the sales slump in September.
Affin Hwang expects that year-end sales campaigns that are typical of the final quarter of the year will lift numbers in the final months of 2018.
Perodua's sales in October was 19,500 units,a twofold increase over September after fulfilling its Myvi order backlog.
Sales of Myvi over the 10 months to Oct 31 had hit 187,700 units, and will likely exceed the targeted 209,000 units for the whole of 2018, said the research house.
In contrast, Proton is expected to see a sixth year of sales decline with only 54,300 units sold in the first 10 months of the year.
Non-national car brands led the auto sector with a 10M18 market share of 51.8%.
"Most non-nationals experienced double-digit growth on a monthly basis except for BMW/Mini, which declined by 9.6% mom to 1.0k units.
"On a brighter note, Mazda remained as the star performer for the fourth consecutive month, achieving a historical sales high of 1.7k units in Oct 18 (excluding the tax holiday month high in Aug 18 of 1.9k), driven by continued demand for its flagship model, the CX-5, and facelifted models (CX-3 and M6)," said Affin Hwang.
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