Proton and Perodua lead the way

by **Cals** Tue 27 Aug 2013, 12:14

Proton and Perodua lead the way
Business & Markets 2013
Written by RHB Research
Tuesday, 27 August 2013 11:29

Automotive sector
Maintain neutral: July’s sales data was the highest monthly sales volume achieved by the market, reaching 68,431 units (+27.6% month-on-month [m-o-m]; +15.1% year-on-year [y-o-y]).

This comfortably beat the previous monthly high of 63,349 units achieved in March 2011, according to data from the Malaysian Automotive Association (MAA).

The cumulative total industry volume (TIV) was up 5.9% y-o-y to 381,919 units and is the second consecutive monthly gain. A strong sales month had been expected, given attractive promotional offers and the seasonally stronger demand ahead of Hari Raya Aidilfitri.

We believe there was also some element of pent-up demand, given that some buyers had held back on their purchase decisions in the preceding quarter owing to the 13th general election and talk of lower car prices. With the shorter working month in August, auto sales will likely moderate.

PROTON HOLDINGS BHD [] sales reached their second highest ever monthly total of 16,629 units (+53.9% q-o-q; +29.6% y-o-y), bettered only by the 17,505 units sold in March 2011. The strong sales were sparked by overwhelming demand for the Proton Saga SV, which we understand has already garnered over 24,000 orders.

Perusahaan Otomobil Kedua Sdn Bhd (Perodua) too posted a strong month, with sales up 21.5% m-o-m and 12.6% y-o-y to 19,152 units on strong demand for the Perodua S-Series models. Continued strong demand for these value-for-money models from the national car manufacturers could significantly lift industry TIV. The market share for national cars spiked higher to 52.3% in July, up from 49.5% in June and 50.2% last July.

Honda walked away with the prize for the strongest m-o-m rebound in the non-national car category, with sales up 86.8% to 6,038 units. This was likely due to the launch of the locally assembled Jazz, Honda’s cheapest model at RM74,800. Nissan had a good month while Toyota also clawed back lost ground.

July TIV is likely to have been the peak sales month for 2013, but it is a good start and in line with our base case expectations for stronger auto sales in the second half of 2013. — RHB Research, Aug 26
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This article first appeared in The Edge Financial Daily, on August 27, 2013.