The automotive industry registered a total industry volume of 642,306 units from January to November this year which is a 45% increase in volume. November figures alone was at 64,404 units which is up 6% month on month.
According to Kenanga, the TIV came within their expectation noting the vehicle deliveries picked up momentum on the easing of parts shortages for certain models (i.e. Perodua and Toyota) and were also boosted by year-end promotional activities. Nonetheless, the research house notes production capacity of several other models remained sub-optimum as the shortages of chips and components persisted on continued disruptions to the supply chain due to intermittent lockdowns in China.
Kenanga projects December TIV to be slightly affected by the seasonal flood season, especially on the east coast of Malaysia. An encouraging sign to note is that the industry order backlogs remained unchanged at 350k for the second month in a row, indicating that deliveries had been fully replenished with new bookings, despite the absence of any tax waiver. Based on sales projections, Mazda currently has 10k backlogged orders and Toyota has 30k backlogged orders and may go beyond its target of 80,000 units for 2022.
Local brand, Perodua’s sales were propelled by the all-new Perodua Alza which gathered massive booking backlogs of 40k units with a waiting time of more than 12 months, with equally strong sales of the MyVi and Ativa, and supported by the Axia, Myvi, and Bezza. Based on sales projection, Perodua currently has more than 200k backlogged orders.
Meanwhile, Proton’ssales were mainly driven by the all-new X70 and X50 (4,751 SUV units sold, making up 43% of sales), and supported by the face-lifted Persona, Iriz, Exora, and Saga. Based on sales projections, Proton currently has 65k backlogged orders.
Kenanga maintains an OVERWEIGHT call on the sector with 2022 TIV target of 680k units (+34%) and 2023 TIV target of 690k units (+2%). The house project a TIV of 690k units in 2023 (+2% vs. an estimated 680k for 2022), which is more upbeat than the forecast of 630k for 2022 and 636k for 2023 by the MAA.
In 2023, the house expects vehicle sales will be underpinned by the continued delivery of order backlogs to the tune of 350k units (as at end-Oct 2022), which was unchanged compared to three months ago, indicating that deliveries had been replenished with strong new bookings, especially for attractive new models (see next page) even in the absence the SST exemption. Additionally, vehicle sales will be supported by launches of new battery electric vehicles (BEVs) which will enjoy the SST exemption and other incentives for EVs up to 2023 for CBU and 2025 for CKD.
Overall for 2023, vehicle sales will remain robust supported by the reopening of the economy; financial assistance to the low-income group and subsidies on fuels, electricity, and selected food items to keep the cost of living in check; a
relatively stable job market; and healthy household balance sheets of the M40 group.
