Autos - Stalled acceleration in January
Recommendation: Neutral
As expected, Malaysia’s new vehicle sales slowed down in January, with total sales volume down 21.7% mom but inching up 0.7% yoy to 50,602 units. We believe weak consumer sentiment and uncertainties surrounding the GST introduction were the main causes and we expect this theme to prevail throughout the year. We maintain our Neutral call on the sector. Berjaya Auto has our only Add call and remains our top sector pick.
What Happened
The Malaysian Automotive Association (MAA) released its January 2015 industry sales data last Wednesdawhaty. Total industry volume (TIV) for January inched up 0.7% yoy but fell 21.7% mom to 50,602 units. Comparatively, the national car makers Proton and Perodua performed better than the foreign makers, with their combined sales volume dropping 10.0% mom but jumping 14.4% yoy to 24,967 units, compared to the foreign brands’ 30.5% mom and 9.9% yoy drop in sales volume to 25,635 units. Nonetheless, the foreign makers still hold the lead in terms of market share, with a combined 50.6% compared to 49.4% for the local brands.
What We Think
We were not surprised by the weak January 2015 figures. The December 2014 sales volume was boosted by aggressive year-end promotions and price discounts and, as such, the payback was felt in January 2015 in terms of weaker numbers. On a yearly basis, the marginal growth is consistent with what we expect as we believe the TIV growth for 2015 will be flat, mainly due to weak consumer sentiment and the uncertainties surrounding the upcoming GST introduction in April. The stronger sales of national models were also not surprising given the robust sales of the Perodua Axia while the take-up of Proton’s Iriz continued to grow, allowing it to register a fourth consecutive month of sales volume growth since October 2014.
What You Should Do
Continue to accumulate Berjaya Auto. Among the major automakers, it bucked the trend as Mazda was the only brand with positive monthly and yearly sales volume growth in January 2015, recording 0.8% mom and 9.8% yoy growth to 875 units. We believe the introduction of new and facelift models and increased localisation will allow BAuto to sustain its growth momentum in 2015.
Source: CIMB Daybreak - 23 February 2015
Recommendation: Neutral
As expected, Malaysia’s new vehicle sales slowed down in January, with total sales volume down 21.7% mom but inching up 0.7% yoy to 50,602 units. We believe weak consumer sentiment and uncertainties surrounding the GST introduction were the main causes and we expect this theme to prevail throughout the year. We maintain our Neutral call on the sector. Berjaya Auto has our only Add call and remains our top sector pick.
What Happened
The Malaysian Automotive Association (MAA) released its January 2015 industry sales data last Wednesdawhaty. Total industry volume (TIV) for January inched up 0.7% yoy but fell 21.7% mom to 50,602 units. Comparatively, the national car makers Proton and Perodua performed better than the foreign makers, with their combined sales volume dropping 10.0% mom but jumping 14.4% yoy to 24,967 units, compared to the foreign brands’ 30.5% mom and 9.9% yoy drop in sales volume to 25,635 units. Nonetheless, the foreign makers still hold the lead in terms of market share, with a combined 50.6% compared to 49.4% for the local brands.
What We Think
We were not surprised by the weak January 2015 figures. The December 2014 sales volume was boosted by aggressive year-end promotions and price discounts and, as such, the payback was felt in January 2015 in terms of weaker numbers. On a yearly basis, the marginal growth is consistent with what we expect as we believe the TIV growth for 2015 will be flat, mainly due to weak consumer sentiment and the uncertainties surrounding the upcoming GST introduction in April. The stronger sales of national models were also not surprising given the robust sales of the Perodua Axia while the take-up of Proton’s Iriz continued to grow, allowing it to register a fourth consecutive month of sales volume growth since October 2014.
What You Should Do
Continue to accumulate Berjaya Auto. Among the major automakers, it bucked the trend as Mazda was the only brand with positive monthly and yearly sales volume growth in January 2015, recording 0.8% mom and 9.8% yoy growth to 875 units. We believe the introduction of new and facelift models and increased localisation will allow BAuto to sustain its growth momentum in 2015.
Source: CIMB Daybreak - 23 February 2015
