Cars from Japan and the US are expected to be cheaper to import in the first 12 years. However, Malaysia can retain the excise duties prevailing at that time.
KUALA LUMPUR: Bermaz Auto Bhd
's first quarter earnings ended July 31 sank 50.8% to RM20.2mil from RM41.11mil in the previous corresponding quarter as revenue fell on lower sales volume, profit margins and contributions from Mazda Malaysia.
The group has declared a dividend of 1.5 sen per share.
For the quarter under review, the group reported revenue of RM391.2mil compared to RM493.6mil in the same quarter last year.
"The 20.7% drop in revenue was mainly due to lower domestic sales volume, particularly for the CX-5 run-out model and ageing Mazda3 model which faced intense competition from new models launched by other comparable brands," the group said in a press release issued on Monday.
"The drop in profit margin in the domestic market was partly caused by the Mazda CX-5 run-out programme as more sales incentives were given for this model since the preceding quarter in anticipation of the new CX-5 model to be launched in October this year.
"The lower profit contribution from MMSB was mainly due to lower unit sales and lower margin as the Group is phasing out the current CX-5 model to gear up for the upcoming new CX-5," it added.
In a research note released prior to Bermaz's earnings report, RHB Investment Research says it expects the group's earnings to rebound in FY18 as it anticipates excitement over the new Mazda CX-5.
"Mazda Malaysia would expand the exports of the new CX-5 from the recently upgraded Inokom assembly plant and would now tap other markets in Asean (except Vietnam and Singapore). It previously only exported the current CX-5 to Thailand.
"Management is guiding for export sales of 17,000 and 25,000 units in FY18F and FY19F respectively. Bermaz would benefit from higher associate earnings at the 30%-owned Mazda Malaysia and the 29%-owned Inokom," it said.
In its press release, Bermaz is also optimistic about the performance of Bermaz Auto Philippines as demand for passenger cars in the country is expected to be boosted by sustained economic growth.
"However, the Group is cautious on the potential impact of the new excise duty expected to be introduced in early next year, which may be mitigated to a certain extend as brought forward purchases of CX-5 and CX-9 from Mazda Japan is expected to be made prior to 1 January 2018."
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