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Thursday July 22, 2010
By EUGENE MAHALINGAM email@example.com
Analysts follow MAA in revising upwards car sales figures for 2010
PETALING JAYA: Analysts are upbeat about the outlook of the local automotive industry for 2010, saying “the current state of the auto industry is one of optimism not seen since 2005.”
“We believe the TIV (total industry volume) will exceed our initial forecast of 546,000 units as consumer and business confidence improves,” said Kenanga Research in a report yesterday.
The research house said it was revising upwards its 2010 TIV forecast to 568,000 units from 546,000 units originally due to the commendable sales performance in the first six months of the year.
The Malaysian Automotive Association (MAA) has revised upwards its 2010 TIV forecast to 570,000 units from 550,000 units initially due to the stellar sales performance in the first half of the year.
The TIV in the first half grew 19.8% to 301,077 units compared with 251,305 units in the previous corresponding period.
However, Kenanga said that it anticipated TIV in the second half of 2010 to “normalise” as the period was expected to be “seasonally slow.”
RHB Research, in its report, said it was maintaining its 2010 TIV growth forecast of 9.5% to 587,698 units.
“We are keeping our 2010 to 2012 TIV projections. We expect TIV to grow 9.5%, 4% and 3.2% in 2010 - 2012, following a 2% contraction in 2009,” it said.
TIV for 2009 was 536,905 units.
RHB Research said it was positive on the earnings outlook for local automotive companies, namely Proton Holdings Bhd, Tan Chong Motor Holdings Bhd, UMW Holdings Bhd and MBM Resources Bhd.
It noted that UMW was looking to increase localisation of its Toyota models, in particular the Camry by 2012 as part of the company’s RM170mil assembly plant upgrading programme.
“The Camry is currently assembled in Thailand and selling for between RM144,000 and RM174,000 as a CBU (completely built-up) unit. Once locally assembled, we believe this price would be brought down by at least 5% as import duty will no longer be imposed,” it said.
The research house also said UMW was looking at increasing the local content of its Toyota Vios, which had 40% local content.
RHB Research also said it was optimistic about the launch of Proton’s Waja replacement model in the final quarter of 2010.
The vehicle is expected to be similar to the Mitsubishi Lancer and priced RM20,000 to RM40,000 cheaper than the actual Lancer.
It also said Proton could be consolidating its plants in Shah Alam and Tanjung Malim and secure contract manufacturing to optimise plant utilisation which would further improve profitability via better cost control and economies of scale.
Sales of Toyota vehicles rose to 34,943 units in the first half of 2010 versus 30,147 units previously, making it the market leader in the non-national passenger car segment.
Sales of Proton vehicles increased to 80,051 units from 67,770 units during the same period.
RHB Research said it was also positive on the outlook for Tan Chong (which distributes Nissan vehicles) and MBM Resources (which has a 20% stake in Perodua).
Perodua sold 94,936 vehicles in the first half of 2010 compared with 77,045 units previously, making it the market leader in the local passenger market.
Sales of Nissan vehicles increased to 13,406 units from 11,220 previously.
An analyst from a local bank-backed brokerage said the TIV performance in the first half of 2010 was within expectations, adding that he had revised upward his forecast to 573,000 from 561,000 initially due to the good industry performance.
He said he was positive on the outlook of the local auto industry, noting that many car companies were offering low interest rates to boost sales.
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