Poor development planning can cause  public roads to be choked with vehicles. 


Malaysia: Vehicle sales jump 39% to 62,649 units

PETALING JAYA: Vehicle sales rose 39% to 62,649 units last month, against 45,062 units in the previous corresponding period due to delivery of backlog orders, according to the Malaysian Automotive Association (MAA).

In a statement yesterday, the association said the total industry volume in February 2023 was up 27% against January 2023’s 49,479 units.

Year-to-date February sales volume improved to 112,128 units against 86,595 units during the same period in 2022.

Sales of passenger vehicles rose to 55,555 units in February 2023, compared with 40,119 units in February 2022.

Meanwhile, sales of commercial vehicles increased to 7,094 units during the month under review from 4,943 units previously, said the MAA.

On the outlook for March 2023, MAA said sales volume is expected to be higher than February 2023, spurred by a delivery rush by companies with their financial year ending on March 31, 2023, Hari Raya festive season promotional campaigns and fulfillment of bookings made during the sales exemption period.

Meanwhile, RHB Research said orders for new cars have remained surprisingly resilient, supported by new car launches, despite the expiry of the sales and service tax (SST) exemption.

According to the research firm, consumers seem to have adapted to the SST-inclusive prices again and are once again placing orders, especially for newly launched cars.

“As of February, Perodua had 220,000 orders, which equals its pre-pandemic five-year average sales of 219,000 units per annum.

“With a sales target of 314,000 units, Perodua only needs 94,000 orders in the remainder of 2023. We think that this will be largely supported by the all-new Axia,” said RHB Research in an auto and auto parts sector report.

Meanwhile, the research firm said Toyota is aiming for 93,000 unit sales in 2023, and already has 50,000 orders. Proton and Honda are targeting 140,000 and 80,000 in sales volume in 2023.

Driven by the strong orders, RHB Research maintained its “overweight” call on the sector.

It said the strong orders, as guided by the various companies’ management, are better than the research firm’s expectations given the higher borrowing costs and persistent inflation.

“The lack of an excise duty reform in 2023 also removes a key uncertainty overshadowing the sector.

“With supply chain constraints largely dissipated, auto companies can better manage their production and convert orders into deliveries, and thus earnings,” it added.

On the recent fourth quarter 2022 ( 4Q22) earnings, RHB Research said only Berjaya Auto Bhd (BAuto) posted stellar results, while the results of the other companies’ under its coverage were below expectations, given the research firm’s initial high estimates.

With orders remaining resilient, coupled with the existing order backlog, these will provide earnings visibility, translating to attractive 4% to 10% yields for companies.

As for stock picks, RHB Research likes UMW Holdings Bhd “as a liquid proxy for Perodua’s expected strong 2023, and for its aerospace segment’s turnaround”.

Additionally, the stock offers a decent yield of around 4%.

“We still like BAuto for its expected growth across all three marques, driven by the local assembly of the Mazda CX-30, and by the continued introduction of new Kia and Peugeot models.

It also offers a 9% FY24 forecast yield,” added RHB Research. On the other end, it said key risks to its rating include softer-than-expected orders and deliveries, and resurgent supply chain issues.

Source: https://www.thestar.com.my/business/business-news/2023/03/21/vehicle-sales-jump-39-to-62649-units