2 EV Models From DRB-Hicom This Year, Proton X90 and Smart EV

Persistent part shortages faced by DRBHCOM have resulted in sub-optimal production levels for its Proton and Honda vehicles. Furthermore, costs remain elevated due to high-cost inventory, high freight cost, and unfavourable forex. Despite the challenges, it plans to roll out two new Proton EV models this year, to be followed by another six more over the medium term.

In a briefing with analysts, the auto assembler gave insights on its guidance for 2023.

For 2023 the target is 140k units (+3%) for Proton and around 80k units (flat) for Honda. On the other hand, for other brands, Mitsubishi and Isuzu sales are seen subdued due to limited new model offerings. Keenanga however said it is keeping its target for Proton and Honda at 140k units and 75k units for FY23, and 142k units and 78k units for FY24, respectively.

DRBHCOM shared that its booking backlogs remain high at 60k units as of February 2023, which is higher than January 2023 of 55k units, indicating that deliveries have been replenished with new bookings, but we believe it is also partly due to slower deliveries due to sub-optimum production level.

In the EV space, it plans to roll out two new Proton EV models this year (Kenanga believes they are the Proton X90 and SMART EV). It has lined up another six new EV models over the medium term. Proton X90 will be Proton’s first-ever hybrid or mild hybrid electric vehicle (MHEV), while SMART EV will be the first step for Proton to penetrate the battery electric vehicle (BEV) market. Proton’s transition to EV is divided into three phases, comprising Phase 1 in 2023-2027 (EV Pioneering), Phase 2 in 2025-2030 (EV growth), and Phase 3 in 2027-2030 (EV right-hand development hub).

However, the research house still likes DRBHCOM for being the second largest player in the local automotive sector, second only to Perodua, with a market share of about 30%, its strong Proton and Honda franchises, and its improving banking franchise under Bank Muamalat. However, its outlook has weakened with rival Perodua turning up the heat with aggressive new launches.

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