Statistics: MY Automotive (NEUTRAL) - April TIV fell

We have April’s car sales/production statistics.

Automotive (NEUTRAL) - April TIV fell

• Correction from high base in Mar.  As expected, Apr 2015 TIV fell MoM, by 33% to 45.2k units (-23% YoY), from an unusually high base in Mar from purchases ahead of GST. This brings 4M15 TIV to 213.5k (-2% YoY), meeting 32% of our full year forecast of 660k units (-1% YoY).
• Drastic changes in share of a slightly smaller pie. Proton vehicle sales hit a 14-year low to 5k units in Apr (behind Honda and Toyota) and could potentially be overtaken by Honda if weak vehicle sales persist (Proton’s current lead over Honda: 3,947 unit).  In 4M15, Perodua and Honda continue to lead in terms of market share gain, adding 6.9ppts and 3.1ppts YoY respectively. Meanwhile, Proton and Toyota shed 4.3ppts and 4.8ppts YoY of market share respectively.

• No change in our views & picks. Our 2015 TIV forecast and NEUTRAL call is unchanged. Our Top Pick remains with MBM which will benefit from its 22.6% associate stake in Perodua whose recent success in vehicle sales growth and lower cost of production from higher automation at its new plant will translate to stronger earnings contribution. We still like BAuto with upside to our forecasts for its: (i) attractive new launches, (ii) JPY cost exposure and (iii) presence in the Philippines (1Q15 TIV: +21% YoY).