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Tiv Still Drifting Down

by research analyst at research house on May 23, 2009

  • 939 views

Losing speed. The persistent weakness in TIV which extended into ...

Losing speed. The persistent weakness in TIV which extended into
Apr, reaffirms our depressing view of the sector. Overall, we expect
2009’s TIV to contract 15-20% YoY. An effective NAP is essential to
reverse the slide. Until then, the auto sector remains an Underweight.
TIV continues to drift lower. Apr’s TIV of 41,135 units continued to
slide, down 7% MoM and 18% YoY. The sequential drop in vehicle
sales was greater on national marques (-10% MoM) vis-à-vis nonnationals
(-3% MoM). Perodua suffered the biggest drop in sales (-14%
MoM) and market share (-2.5% MoM) but was still capable of retaining
its No.1 status in the industry with a 30% market share.
YTD’s TIV down 12% YoY. Other major marques – Toyota, Proton and
Honda too reported weaker sales (-3%, -4%, -12% MoM respectively).
Only Nissan (+2% MoM) showed a 3% rise in sales, spurred on by its
MPV Grand Livina model (+9%). YTD, TIV fell 12% YoY to 159,816
units, accounting for 35% of our estimates of 438,000-465,000 units.
We expect TIV to contract 15-20% for 2009, as the sector continues
to suffer from an absence of new model launches and a stricter
financing environment. Reject rates for Proton’s applicants remain high
whilst the 85-100bps hike in Hire Purchase (HP) rates on non-national
cars will further dampen sales.
A good NAP is needed to wake the sector up. The National
Automotive Policy (NAP), which will be revealed by 3Q09, needs to
boldly address among others: (i) consolidation of national marques and
vendors, and (ii) issues on Approved Permits (APs). A pro-active
guideline will help shape the sluggish sector. Until then, we maintain
our Underweight call, with Sell calls on Proton and Tan Chong.

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Tiv Still Drifting Down Tiv Still Drifting Down Document Transcript