Car sales slow


PETALING JAYA: Constraints on the supply side, particularly in the chip sector, have hampered the growth of the automotive industry.

Statistics released by the Malaysian Automotive Association (MAA) showed that the continued shortage of computer chips and supply chain disruption due to floods in December affected total industry volume (TIV) figures in January. 2022.

Proton seems to be the most affected by the floods, according to statistics.

“The worst performer both month-over-month and year-over-year (yoy) is Proton, which fell 68% mom and -28% yoy, as its suppliers were hit by flooding in Shah Alam, which hampered the production and left dealers short of stock.

“This was compounded by a lack of carryover inventory from December as the company struggled to close the gap between supply and demand,” Kenanga Research said in its report.

Proton sales were contributed by the new X70 and X50 which made up 3,329 units sold and accounted for up to 77% of its sales.

Kenanga Research said that despite industry supply limitations, year-on-year growth is expected as the economy has recovered from the shutdowns.

He also noted that automakers are diverting their limited supply of chips to popular models to meet pending demand that stretches for up to six months for some car models.

“Going forward, February sales are expected to grow at the same pace as January on the short labor month and supply chain disruption due to recent flooding and continued shortage of chips,” Kenanga said. Research.

Hong Leong Investment Bank Research (HLIB Research) said Proton has a sales target of 150,000 units for 2022, implying 30.8% growth over the previous year and that includes export volumes .

The Proton Group is banking on continued strong domestic demand, new launches and new export markets, he said.

MIDF Research said while domestic cars saw a year-on-year decline of minus 5% to 21,760 units last month, this mainly reflects the impact of the supply constraint following the floods.

“Non-nationals are doing much better, up 79% year-on-year to 18,821 units. Among the major players, the Toyota, Honda and Mazda brands led the growth of the non-domestic segment,” said MIDF Research.

Looking ahead, MIDF Research said it remained positive on the auto industry due to a recovery in domestic consumption.

“The outlook is underpinned by strong ongoing bookings, support from the tax holiday extension, historically low interest rates and gradually improving employment and household income conditions,” a- he declared.

MIDF Research’s top sector picks are Bermaz Auto Bhd with a “buy” call and a target price of RM1.98, MBM Resources Bhd with a “buy” call and a target price of RM3.87 and UMW Holdings Bhd with a “buy” call and a target price of RM4.35.

TA Research maintained its 2022 TIV forecast at 600,000 units, a year-on-year growth of 17.9% and maintained its “overweight” position on the sector.