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Monday April 1, 2013

Auto sector likely to be vibrant yet competitive


PETALING JAYA: Kenanga Research is anticipating a vibrant yet competitive environment for the local auto sector due to the entry of new players and brands in the market.

“The local auto players are likely to face greater competition with the increase of new players in the market. Already, we have seen a shift in the local market share for the national and non-national car makers alike,” it said in a report yesterday.

“Based on data released by the Malaysian Automotive Association (MAA), Proton’s market share has dropped by four percentage points to 26% in 2012 from 30% in 2011 even though it retained its No. 2 position.

In contrast, Toyota, Hyundai, Kia, Volkswagen, Audi, BMW and Audi’s shares have risen significantly in the past one year through the sales of new and improved models.”

Kenanga Research noted that vehicle sales tended to pick up in the second quarter of the year, compared with the first quarter, due in part to the Chinese New Year holidays.

“However, for this coming second quarter 2013, we find it more difficult to gauge the quarter’s sales performance as consumers may defer purchases pending the outcome of the upcoming general election. In our view, the revised National Automotive Policy (NAP) is likely to be revealed only after the general election,” it said.

“Among others, the revised NAP may see the introduction of more incentives to auto assemblers and manufacturers to produce more energy-efficient vehicles in Malaysia.”

Kenanga Research said this would benefit DRB-Hicom Bhd, a franchise holder for Honda Insight, Civic Hybrid and Jazz Hybrid; as well as UMW Holdings Bhd, the franchise holder for Toyota Prius, Prius C and Lexus CT200h.

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