BACKLOG of orders for Perodua and Proton cars particularly should drive Malaysia's new vehicle sales in the last two months of 2024.
Channel checks by some analysts indicate that Perodua and Proton's backlog orders stood at about 100,000 and 24,000 units respectively as at the end of September.
CIMB Securities believe this will drive sales volumes in November and December, especially when coupled with ongoing promotional campaigns.
As a result, the firm raised its 2024 forecats of total industry volume (TIV) by 5.2 per cent to 790,000 units, driven by higher sales contributions from national brands and the delay of the implementation of the RON95 petrol subsidy rationalisation plan to beyond 2024.
While expecting resilient demand to sustain TIV growth in 2024, CIMB Securities expects a challenging outlook for the industry next year.
Industry body Malaysia Automotive Association (MAA) recently raised its 2024 TIV forecast to 800,000 units, in view of the strong performance in the first 10 months.
CIMB Securities also said the potential revision of the open market value (OMV) calculation method could lead to higher average selling prices for new vehicles.
MAA previously estimated that a potential revision to the OMV calculation could increase the average selling prices of locally assembled vehicles by 8.0–20 per cent.
However, implementation of the revised OMV calculation has been deferred multiple times, with the latest deferment extended until Dec 31 2024.
National Brands Remain Pacesetter
National brands are still a popular choice among consumers given that seven out of the 10 best-selling models in the market came from Perodua and Proton during the first 10 months. Overall, national brands' market share grew by 1.9 percentage points (pp) to 62.7 per cent..
Market leader Perodua expanded its market share by 3.1pp to 44.3 per cent during the period. This was on the back of 10.1 per cent year-on-year (yoy) volume growth.
Toyota retains its leading position in the non-national segment, albeit with a lower 12 per cent market share versus 13.3 per cent in the first 10 months of 2023, followed by Honda with 9.9 per cent.
Chinese players continue to capture a bigger market share, with Cherry having now become the fifth-largest marque in the Malaysian market, ahead of Mitsubishi and Mazda.
In the meantime, BYD is leading sales in the battery electric vehicle (BEV) segment with a 37 per cent market share on the back of 6,390 units sold in the 10 months, followed by Tesla with a 26 per cent market share.
CIMB Securities estimated BEV sales to have contributed two per cent to the TIV in the 10 months.
E-invoicing Effect
Meanwhile, Kenanga Research said the implementation of e-invoicing is having a lesser impact on car sales than it initially believed.
"Automakers are racing to provide discounts and rebates to ensure sustained demand and lessen the impact of e-invoicing on consumer sentiment."
E-invoicing essentially will cease the common practice of providing 100 per cent hire purchase financing. Under the Hire Purchase Act 1967, customers are required to make a minimum down payment of 10 per cent.
Kenanga Research also said the recent strengthening of the ringgit against the US dollar is expected to take effect in reducing the costs for automotive parts in the second half of 2025 as well as improving margins as automakers usually procure inventory six months ahead of production to ensure supply sustainability.
"In general, the industry's earnings visibility is still good, backed by a booking backlog of 160,000 units as at end-October 2024, unchanged from a month ago.
"More than half of the backlog is made up of new models, alluding to the appeal of new models to car buyers. This trend is likely to persist throughout 2024 given a strong line-up of new launches,' the firm added.