Visitors taking a look at vehicles displayed at a car showroom. - Filepic
KUALA LUMPUR: The automotive sector is expected to recover gradually amidst a strengthening of the Malaysian ringgit and an improvement in consumer spending, according to Affin Hwang Capital Research.
Additionally, Affin said the consumer confidence index looks promising, rebounding from 69.8 to 76.6 quarter-on-quarter.
“We forecast 2017 total industry volume (TIV) sales of 592,000 units (+2.0% year-on-year). Overall, we see this encouraging bounce-back from what was a sluggish February as sustainable,” it said.
“Our in-house view is premised on the recovery of the ringgit as we expect the local currency to stabilise in second half of 2017, spurring consumer spending. However, headwinds such as unfavourable exchange rates and stricter auto financing are still challenges for the sector.
“We maintain our ‘neutral’ call on the sector. UMW Holdings, MBM and APM under our coverage are all with a ‘hold’ rating,” Affin said.
According to the Malaysian Automotive Association (MAA), March auto sales increased by 26.5% month-on-month to 53,700 units, with the positive numbers mainly driven by higher sales from brands like Honda (3,299 units), Perodua (2,856 units) and Toyota/Lexus (1,654 units).
As per MAA, this rebound was due to the longer working month in March coupled with companies rushing to deliver vehicles to customers on time in line with their March financial year-ends.
All in, 3M17 TIV was within our expectations of 592,000 units for 2017.
Sales of national carmaker Proton have been relatively flat, with year-to-date sales of 19,400 units, up 0.8% year-on-year.
Perodua has chalked up year-to-date sales of 50,300 units (+6.5% year-on-year) owing to the launch of the new facelift of the Perodua Axia model in January 2017, launch of new Bezza model in July 2016 and aided by attractive promotions for other models.
Brands like Honda, Toyota and Nissan registered healthy month-on-month sales of 11,000, 6,200 and 2,600, respectively.
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