Autos - 2014: The year the tide changed
Recommendation: Neutral
Dec 2014 saw the TIV grew 16.9% mom and 6.9% yoy to 64,660 units, boosted by aggressive year-end promotions by automakers. As a result, the 2014 TIV came in well within our expectation at 666,465 units, making up 99.5% of our full-year forecast of 670,000 units. Foreign brands led the charge and for the first time overtook the national brands in sales volume, grabbing a 53.3% market share versus 46.7% for the locals. The local car makers have an uphill task to wrest back their market share in 2015. Berjaya Auto remains our only Add call and is our top pick for the sector. We maintain Neutral on the sector.
What Happened
The Malaysian Automotive Association (MAA) released its December 2014 industry sales data yesterday. Total industry volume (TIV) for the month grew 16.9% mom and 6.9% yoy to 64,660 units. Overall, the TIV for 2014 inched up 1.6% yoy to 666,465 units. Non-national brands were the winner in December 2014, achieving 29.2% mom and 9.4% yoy growth to 36,911 units. Cumulatively, the non-nationals also outperformed the national brands in 2014, with 10.6% yoy growth to 355,103 units, compared to 7.0% decline in the national brands’ sales volume to 311,362 units. As a result, 2014 was the year when foreign brands overtook national brands in sales volume, grabbing a 53.3% market share compared to 46.7% for the national car makers.
What We Think
The December 2014 figures did not come as a surprise, as the year-end sales figure had traditionally always been strong, due to various promotions and discounts given by automakers in order to clear their inventories. This year was no different, as car makers undertook aggressive campaigns and promotions in order to boost up their sales volume and clear their existing stock. As a result, the 2014 TIV was well within what we had expected, making up 99.5% of our full-year 2014 forecasted TIV of 670,000 units. The foreign car makers had a relatively better 2014 compared to the national brands, as increased localisation allowed their models to be priced more competitively, reducing the price gap between the foreign and national models, leading to higher sales for the foreign brands.
What You Should Do
Continue buying Berjaya Auto. It has our only Add recommendation and remains as our top pick for the sector.
Source: CIMB Daybreak - 22 January 2015
Recommendation: Neutral
Dec 2014 saw the TIV grew 16.9% mom and 6.9% yoy to 64,660 units, boosted by aggressive year-end promotions by automakers. As a result, the 2014 TIV came in well within our expectation at 666,465 units, making up 99.5% of our full-year forecast of 670,000 units. Foreign brands led the charge and for the first time overtook the national brands in sales volume, grabbing a 53.3% market share versus 46.7% for the locals. The local car makers have an uphill task to wrest back their market share in 2015. Berjaya Auto remains our only Add call and is our top pick for the sector. We maintain Neutral on the sector.
What Happened
The Malaysian Automotive Association (MAA) released its December 2014 industry sales data yesterday. Total industry volume (TIV) for the month grew 16.9% mom and 6.9% yoy to 64,660 units. Overall, the TIV for 2014 inched up 1.6% yoy to 666,465 units. Non-national brands were the winner in December 2014, achieving 29.2% mom and 9.4% yoy growth to 36,911 units. Cumulatively, the non-nationals also outperformed the national brands in 2014, with 10.6% yoy growth to 355,103 units, compared to 7.0% decline in the national brands’ sales volume to 311,362 units. As a result, 2014 was the year when foreign brands overtook national brands in sales volume, grabbing a 53.3% market share compared to 46.7% for the national car makers.
What We Think
The December 2014 figures did not come as a surprise, as the year-end sales figure had traditionally always been strong, due to various promotions and discounts given by automakers in order to clear their inventories. This year was no different, as car makers undertook aggressive campaigns and promotions in order to boost up their sales volume and clear their existing stock. As a result, the 2014 TIV was well within what we had expected, making up 99.5% of our full-year 2014 forecasted TIV of 670,000 units. The foreign car makers had a relatively better 2014 compared to the national brands, as increased localisation allowed their models to be priced more competitively, reducing the price gap between the foreign and national models, leading to higher sales for the foreign brands.
What You Should Do
Continue buying Berjaya Auto. It has our only Add recommendation and remains as our top pick for the sector.
Source: CIMB Daybreak - 22 January 2015
