25 June 2019, Tuesday | 05:18pm

Proton, Perodua set to dominate sales in Q1

2019-04-15

PETALING JAYA: National carmakers Proton and Perodua look set to dominate sales over their foreign counterparts in the first quarter of this year, as more drivers traded their cars for more competitively-priced, local sport-utility vehicles (SUVs).

Sales of Proton and Perodua’s maiden SUVs – the X70 and Aruz, respectively – saw the national marques surpassing the non-national makes’ market share in the first two months of this year for the first time since 2013, said Kenanga Research.

“We believe that consumers are changing their preferences to national carmakers which offer cheaper variants.

“Given this year’s focus on SUVs, the Honda CR-V (RM137,000 to RM163,000) has a higher price tag compared with the X70 (RM98,000 to RM124,000). On the lower-end segment, meanwhile, the Honda BR-V (RM80,000 to RM90,000) also has a higher price tag compared with the Aruz (RM73,000 to RM78,000).”

In light of the steady demand for Proton and Perodua vehicles, Kenanga Research has revised upwards its 2019 total industry volume (TIV) forecast to 600,000 units from 590,000 units previously.

The strong consumer demand for competitively priced SUVs has resulted in many rival foreign marques struggling to make sales this year, with a select number of car companies predicting a drastic slowdown following the three-month tax holiday period in 2018.

A spokesperson from a Europe-based car company who requested anonymity said vehicle sales dropped significantly after the tax holiday period ended.

“Sales in February this year were one of the worst we had seen in years. We are expecting sales in the first quarter itself to be quite challenging,” he said.

Demand for cars surged immediately last year when the government announced that there would be a three-month tax holiday from June 1 to Aug 31, with the goods and services tax being zero-rated during the period.

One industry observer said the tax holiday resulted in a sudden surge for orders that was “difficult to keep up with”.

“Many people wanted to take advantage of the tax exemption. Even individuals that were not planning to buy cars ended up getting one anyway. It was a mad rush!”

Kenanga Research said there was tepid demand post the zero-rated holiday, in the fourth quarter of 2018.

“Overall, we saw weaker performance in the fourth quarter of 2018, except for Perodua-linked companies, as expected, due to the higher base in the third quarter of 2018 which was boosted by the tail-end of the zero-rated tax holiday.”

February 2019 TIV decreased marginally by 1.8% year-on-year to 39,800 units, dragged by weaker sales from foreign carmakers.

Affin Hwang Capital said the 17.8% month-on-month decline was expected, attributable to a shorter working month in conjunction with the Chinese New Year festive holidays.

“All in, the two-month TIV units are broadly within our 2019 full-year estimates of 603,000 units,” it said.

The TIV for the first quarter of 2019 is expected to be announced later this month by the Malaysian Automotive Association (MAA). At its biannual media briefing in January, the association said 2018 vehicle sales grew 3.8% to 598,714 units, exceeding its forecast of 1.5%.

On the sales trend for 2019, MAA president Datuk Aishah Ahmad said the government’s delay in approving new car models’ pricing has negatively affected carmakers’ plans to launch new models.

The delay, in turn, is expected to take a toll on the overall sales of new vehicles this year.

Source:TheStaronline/http://tinyurl.com/y48492z4

 

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