Tuesday September 22, 2009
Brokerages see improved outlook for auto sector
By YEOW POOI LING
Festive promotions and launch of new models expected to lift TIV in second half
PETALING JAYA: While the fourth quarter is seasonally lower for car sales, the threat of a “serious slowdown” in the auto industry is waning.
TA Securities noted that the total industry volume (TIV) in the first eight months, at 351,599 units, had covered more than 70% of the Malaysian Automotive Association’s full-year target of 500,000 units.
“We believe the numbers have not imputed the effect of the festive season. Merdeka and festive promotions would only kick-in in September, at the earliest. Underpinning this, our outlook for September is very positive,” the brokerage said in a recent report.
“It would not be too optimistic to say that the worst is over for the industry. There is potential upward movement in TIV numbers in the second half of 2009,” it added.
HwangDBS Vickers Research, meanwhile, said vehicle sales in September would remain firm as buyers normally rushed to take delivery of new cars ahead of the Hari Raya celebrations.
Following that, buyers might prefer to take delivery of their new vehicles next year, it said.
OSK Investment Bank said consumers could look forward to new models to be released in the next couple of months, led by Perodua’s new MPV slated for launch by end-November.
Tan Chong Motor Holdings Bhd is expected to release its completely-knocked-down (CKD) Teana, a D-segment sedan, in the first half of next year, while Proton Holdings Bhd plans to launch its new Waja, which is based on a rebadged Lancer Fortis.
“The Myvi replacement will be out by the first half of 2011 as its five-year lifespan expires. From the end of 2011 to early 2012, Tan Chong intends to look at the possibility of bringing in a CKD model to introduce its new line-up,” the research house said.
Next month, the Government is anticipated to release the revised National Automotive Policy in conjunction with Budget 2010. In competing head on with neighbour Thailand, the Government’s possible incentives may include tax holidays on export duties and corporate income, it added.
If further liberalisation took place, major carmakers were likely to set up full-fledged manufacturing lines and establish research and development centres, thus benefiting existing CKD assemblers like the Naza Group, UMW-Toyota and Honda Malaysia due to their existing collaborations with local franchise holders, OSK said.
Auto parts suppliers were also expected to benefit, especially those with ongoing long-term relationships with CKD assemblers and carmakers, it said, adding that this could encourage consolidation among vendors given the current fragmented segment.