FW: Jan 2018 Auto Stats: MY Automotive (POSITIVE) - Jan 2018 TIV: Uninspiring but…

 

 

Auto Stats: MY Automotive (POSITIVE) – Jan 2018 TIV: Uninspiring but…

• MoM sales overhang is no concern. Double-digit MoM decline in January TIV is no strangers to the industry as car sales typically cool down following a strong 4Q, driven by aggressive sales campaigns to clear inventories. What caught our attention in this recent set of numbers was the TIP whereby production hit an all-time high at 68k units (+91% MoM, +49% YoY), indicating a strong February TIV. Our 2018 TIV forecast of 610k units (+6% YoY) is unchanged and we remain POSITIVE on the sector with bottom-up preference for Perodua (via Pecca, MBM, UMWH) and Mazda (via BAuto) exposures.
• Uninspiring TIV sales but… Despite a flat YoY TIV recorded in Jan 2018, the composition of sales saw a drastic change, with Perodua (+25% YoY) and Mazda (+62% YoY) leading YoY volume growth at the expense of Proton (-34% YoY) and Toyota (-39% YoY). Strong sales by Perodua and Mazda was on encouraging response for their new launches i.e. Perodua Myvi, Mazda CX-5. For the first time in history, Perodua was able to hit a high in market share of close to 40% and we expect this momentum to sustain in the coming months; as of early-Feb, >48k bookings for the new Myvi was recorded, while ~18k units have been delivered (~9k units in Jan 2018 alone). With >85% of consumers opting for the 1.5L variant of the new Myvi, we expect Perodua and auto parts players in the supply chain to record better earnings in the coming quarters, alongside positives from a stronger MYR.
• Exceptionally strong TIP. Despite a slighly shorter working month due to public holidays (i.e. New Year, Thaipusam), Jan 2018 TIP hit a record high with BMW (+6.9x MoM, +116% YoY), Perodua (+2.4x MoM, +128% YoY) and Mazda (+132% MoM, +138% YoY) leading the pack; each of these three marques hit their individual production records. As a leading indicator, we expect this strong set of TIP numbers to translate to meaningful growth in TIV in the coming months. We do, however, caution that Feb 2018 TIV could still be capped due the Chinese New Year holiday.

 

 

Ivan Yap | Analyst, Equity Research

Maybank Investment Bank Berhad (15938-H)
7^th Floor, Tower C, Dataran Maybank, 1, Jalan Maarof, 59000, Kuala Lumpur, Malaysia

Tel: +603 2297 8612 | Fax: +603 2284 2137
Email: ivan.yap@maybank-ib.com

 

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