PETALING JAYA: Vehicle sales are likely to be higher this month due to the introduction of new car models as well as the National Day promotional campaigns by companies, according to the Malaysian Automotive Association (MAA).
The association also expects higher bookings to continue for the rest of the year.
The slightly higher total industry volumes (TIV) for July indicated the normalisation of the automotive supply chains and fulfillment of bookings new model launches recently.
The total industry production last month, at 66,862 units, was higher compared with the 58,051 units in June.
MAA had last month revised its TIV forecast for 2023 upwards to 725,000 units from 650,000 units in January.
This is due to the stable economic outlook, new model launches and further improvement in the automotive industry’s supply chain ecosystem.
Commenting on this, Socio Economic Research Centre executive director Lee Heng Guie said other contributing factors could be due to cars being a necessary item for people to travel in comfort.
“Car sales don’t go down unless it’s a recession or in a very high interest rate environment. They have become more of a necessity these days due to living conditions here,” Lee said.
According to him, there is sustained buying interest from the wide range of electric vehicle (EV) models that have been introduced recently.
“I reckon there could be people who are piqued by the novelty of owning an EV car and have switched cars. For those who can afford it, an EV can be a second or third vehicle for inter-city travelling,” he said.
Cumulatively, the year-to-date TIV until July stood at 429,807 units indicating a year-on-year growth of 12.6% from from a year ago.
MIDF Research, in its update recently, estimated annualised sales could hit 736,812 units, which would be largely within its estimates and made up some 103% of its TIV forecast of 713,000 units this year.
The annualised TIV will also be within MAA’s revised 2023 forecast of 725,000, and at the upper range of consensus estimates.
Based on the considerable waiting period for popular car brands, the July TIV is sustainable going forward.
The backlog orders may spill over into next year as there appeared to be sustained booking replenishments, it said.
The waiting period for Perodua is estimated to be six to seven months, Toyota (six months) and Mazda (five months).
“While we acknowledge a higher overnight policy rate which had risen 125 basis points since May 2022, we believe demand remains supported by sustained improvement in unemployment rate and income conditions, while a moderating inflation trend also lends support,” said MIDF Research.
Meanwhile, Hong Leong Investment Bank Research (HLIB Research) expects the TIV to drop.
“Despite the expected strong TIV for the year, we maintain our ‘neutra’l rating on the sector, as we expect TIV to drop after fulfilling of the current huge backlog orders of 300,000 units,” it said in a recent report.
HLIB Research has a TIV forecast of lower 700,000 units for 2023 from the previous year.
However, it also noted the high industry order backlogs and sustained strong demand for new attractive model launches.“Recently we have seen new EV players entering into the market with attractive pricing, which may pose threat to the current non-national OEM incumbents,” it said.
Public Invest Research noted of Proton’s first half 2023 TIV which had surged 10% year-on-year to a new high of 366,037 surpasses pre-pandemic levels.
DRB-Hicom Bhd
, which also distributes other car brands and owns a 50.1% stake in Proton notes in its recent second quarterly report that its automotive revenue had increased by 12.6% to RM2.8bil.
This increase was mainly attributed to Proton’s higher sales volume, it stated.
It aimed to launch the Smart brand in Malaysia – the smart #1 in the fourth quarter of this year with the price being a potential competitive game changer for vehicles in this segment.
Meanwhile, BMI, a Fitch Solutions company, forecast EV sales to quadruple this year, although the country’s overall EV penetration rate would at a nominal 1.8%.In a note, BMI said Volvo and Mercedes-Benz’s local EV manufacturing set-up would boost appetite for EVs in the country.
