Most analysts are keeping their TIV forecasts at around the original 600,000 vehicles target

by RAHIMI YUNUS/ pic by BERNAMA

AUTOMOTIVE companies are on the right trajectory to achieve the total industry volume (TIV) target at 600,000 units as sales momentum is expected to continue in the second half of the year (2H19).

Most analysts are keeping their TIV forecasts for the year in tandem with the Malaysian Automotive Association’s (MAA) move to maintain its original 600,000 vehicles target.

Kenanga Investment Bank Bhd analyst Wan Mustaqim Wan Ab Aziz said volume is expected to be driven by national car manufacturers Proton Holdings Bhd and Perusahaan Otomobil Kedua Sdn Bhd (Perodua), as well as new launches by other players.

“2H19 would be better than 1H19 on stronger sales from Perodua and Proton, as well as other marques which will be launching all-new and facelifted models,” he told The Malaysian Reserve (TMR).

However, on a yearly basis, the TIV for the next six-month period is expected to go lower than last year’s figure due to high base effect from the tax holiday period in 2018.

Wan Mustaqim said 2H19 is expected to have a lower TIV at around 304,000 units from last year’s 309,000 units due to the surge of sales during the tax-free period between June and August.

JF Apex Securities Bhd analyst Nursuhaiza Hashim concurred with Wan Mustaqim, saying that national carmakers and new models could offset the high base effect in 2018.

“Initially, I thought it might be flat due to the high base effect in the zero-rated Goods and Services Tax period. However, stellar growth from carmakers, especially Proton and Perodua, and the introduction of new variants could offset the higher sales volume from last year,” she told TMR.

Both Wan Mustaqim and Nursuhaiza kept TIV forecasts for 2019 at 600,000 and 611,300 units respectively.

Hong Leong Investment Bank Bhd analyst Daniel Wong noted in a report that the research house maintained its forecast at 596,600 units for the year, given the high base effect.

Recently, MAA president Datuk Aishah Ahmad said the association has maintained its original TIV forecast of 600,000 units, although she highlighted several factors that would determine the demand including the cut in Overnight Policy Rate to 3%, the introduction of new models, stringent hire-purchase lending rules, and consumers and businesses spending sentiment.

Carmakers sold 296,334 vehicles in 1H19, 2.3% higher or 6,735 units more compared to the same period last year. This is equivalent to 49.4% of MAA’s 600,000 units of TIV.

The passenger vehicle segment rose 3.8% or 9,952 units to 270,875 units compared to 260,923 units sold in 2018.

On the other hand, the commercial vehicle segment continues the downward trend by 11.2% or 3,217 units to 25,459 units compared to 28,676 units registered in 1H19.

Perodua, the country’s top carmaker in terms of market share, recently revised its 2019 sales target upwards from 231,000 units to 235,000 units, following a strong performance in the first six months.

In 1H19, the company clinched a bigger market share at 41.1% year-on-year, up 0.7% or 4,700 units to 121,800 vehicles.

The Myvi model accounted for 43,000 units, followed by the Axia at 32,000 units and the Bezza at 22,000 units.

Among new models and facelifts to be introduced in the coming months are the all-new Nissan Leaf, new Mazda CX-5 and all-new CX-8, while current top models Proton X70 and Perodua Aruz will continue to drive the market.