CIMB Research said the just-announced fuel subsidy mechanism is expected to underpin sales momentum in the national car segment for Proton Holdings Bhd and Perodua as well as Japanese marques.
PETALING JAYA: Aggressive promotional campaigns amid the National Day celebrations have boosted vehicle sales in the month of August to 73,041 units, the highest monthly sales volume year-to-date.
Competition is expected to remain keen moving ahead even as Japanese marques concede some ground to Chinese brands that have been making their presence felt in the country’s auto scene, although the former are not expected to take this lightly.
September sales volumes are expected to see a slight dip due to the National Day public holidays, although the announcement of the RON95 fuel subsidy for citizens is expected to provide clarity for people deciding on car purchases.
According to the Malaysian Automotive Association (MAA), the stronger sales performance was supported by higher stock availability following robust production in July, aggressive promotional campaigns in conjunction with the National Day celebration, and new model launches such as the Proton X50, Honda H-RV, and Jaecoo J8.
Sales for Perusahaan Otomobil Kedua Sdn Bhd (Perodua) fell 2.1% year-on-year (y-o-y) in the year-to-date period, weighed down by weaker numbers for passenger cars, which declined 2% and sports utility vehicles dropping by 10.6%.
This was partially offset by stronger demand for multipurpose vehicles that gained 7.9% y-o-y.
In the non-national segment, CIMB Research noted Toyota retained its leading position with an 11.8% market share, despite a 3.5% y-o-y drop in sales volume, which is broadly in line with an overall market contraction.
The research house noted car brands from China continued their rapid ascent, expanding their market share to 5.9% in the year-to-date period from 3% in the same period last year.
“Growth was driven by new model launches from Jaecoo and Jetour, while incumbents BYD and Chery sustained momentum. Notably, Jaecoo emerged as the fifth-largest brand by sales volume year-to-date with a 2.1% market share, surpassing Mitsubishi with 1.9%,” the research house said.
CIMB Research added that the just announced fuel subsidy mechanism is expected to underpin sales momentum in the national car segment for Proton Holdings Bhd and Perodua as well as Japanese marques.
“We foresee potential upside to our total industry volume (TIV) forecast for this year, as our initial assumptions had factored in a potential drag on new vehicle sales from the removal of petrol subsidies.
“It will also support demand for mass-market internal combustion engine vehicles,” CIMB Research said.
Meanwhile, TA Research downgraded its sector rating to “underweight” from “neutral”, on a lack of near-term catalysts to reverse the current overpriced valuation among automotive stocks.
“Intense price competition is expected to pressure margins, suggesting that market share gains by any brands are likely achieved at the expense of profitability.
“Our TIV forecast for this year remains at 750,000 units, representing an 8.2% y-o-y decline, underscoring the cautious outlook for the automotive sector,” TA Research added.
