Car sales hit speed bump


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PETALING JAYA: Supply-side constraints especially from the chip sector have impeded the growth of the automotive industry.

Statistics released by the Malaysian Automotive Association (MAA) showed that ongoing computer chip shortage and the disruption of the supply chain due to the December floods had affected total industry volume (TIV) numbers in January 2022.

Proton appeared to be the most affected by the floods, according to the statistics.

“The worst performer both month-on-month m-o-m and year-on-year (y-o-y) is Proton which fell 68% m-o-m and -28% y-o-y, due to its vendors being affected by the floods in Shah Alam, which hampered production and left dealers short on stock.

“This was compounded by a lack of carry-over stock from December as the company worked to close the gap between supply and demand,” Kenanga Research said in its report.

Proton’s sales were contributed by the new X70 and the X50 which constituted 3,329 units sold and they made up to 77% of its sales.

Kenanga Research said despite the supply limitations to the industry, growth is expected y-o-y as the economy had recovered after the lockdowns.

It also noted that automakers are diverting their limited chip supply towards popular models to meet back-logged demand that stretches up to six months for certain car models.

“Moving forward, sales for February are expected to drive at the same speed as January on the short working month and supply chain disruption due to recent floods and ongoing chip shortage,” Kenanga Research said.

Hong Leong Investment Bank Research (HLIB Research) said Proton has a sales target of 150,000 units for 2022 which implies a growth of 30.8% from the previous year and this includes export volumes.

The Proton group is banking on continued strong domestic demand, new launches and new export markets, it said.

MIDF Research said that while national cars registered a minus 5% y-o-y drop to 21,760 units last month, this mainly reflects the impact of the supply constraint as a result of the floods.

“The non-nationals fared much better, up by 79% y-o-y to 18,821 units. Of the key players, the Toyota, Honda and Mazda marques led the growth in the non-national segment,” MIDF Research said.

Moving forward, MIDF Research said it remains positive on the automotive industry due to a recovery in domestic consumption.

“Prospects are underpinned by strong outstanding bookings, support from the tax holiday extension, record low interest rates and gradually improving employment as well as household income condition,” it said.

MIDF Research’s top sector picks are Bermaz Auto Bhd with a “buy” call and target price of RM1.98, MBM Resources Bhd with a “buy” call and target price of RM3.87 and UMW Holdings Bhd with a “buy” call and target price of RM4.35.

TA Research maintained its TIV forecast for 2022 at 600,000 units which is a 17.9% y-o-y growth and maintained its “overweight” stance on the sector.

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