Tsunami won't affect Japanese car demand

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Tsunami won't affect Japanese car demand

Postby admin » Mon May 09, 2011 1:58 am

Supply problems caused by the tsunami won't affect Japanese car demand

Only a small minority of impatient buyers may switch to S. Korean models

PETALING JAYA: South Korean passenger car marques in Malaysia will not benefit significantly from the expected Japanese vehicle delivery shortfalls due to supply constraints of car parts following the earthquake in Japan, according to automotive analysts contacted by StarBiz.

An analyst with CIMB Research said a small minority of impatient customers might switch to rival South Korean models during the expected shortfall in Japanese vehicle deliveries in the second and third quarters of 2011.

“The perception of South Korean cars is gradually changing in Malaysia, with sleek new models such as the Hyundai Sonata sedan and Tucson sport-utility vehicle.”

However, the analyst added that the vast majority of car buyers would stick with their choices.

“A car purchase is a huge investment. Those who really want Japanese cars would not mind waiting a few extra weeks or months,” said the analyst.

Another automotive analyst with a local research firm agreed, and pointed out that the strong resale value of Japanese models was a crucial factor for many car buyers.

“The longer waiting period for Japanese cars is not a structural change for consumers,” she said.

Frost & Sullivan partner Kavan Mukhtyar pointed out that besides South Korean marques, national carmaker Proton Holdings Bhd might benefit marginally from impatient car buyers.

“However, the disruption in the auto part supplies from Japan is not expected to be a long-term issue, and any gains made by the South Korean marques and Proton will not be dramatic,” he said.

Proton is also facing supply issues for components made in Japan for its Inspira sedan.

Kavan does not expect a major shift in car buying preferences to South Korean marques in Malaysia in the short term.

“The growing popularity and sales of Hyundai and Kia cars is a global phenomenon. However, in Malaysia, the market share for South Korean marques is small.”

Last year, Hyundai-Sime Darby Motors and Naza Kia Malaysia sold 9,183 and 10,330 passenger vehicles respectively, and had a combined 3.2% market share.

In the first quarter of 2011, Hyundai-Sime Darby Motors recorded sales of 2,964 units (a year-on-year increase of 29% when compared with 2,302 units sold in the same period last year).

The top-selling Hyundai model was the Sonata (1,000 units), followed by the i10 compact car (726 units) and Tucson (619 units).

While April 2011 sales figures for Hyundai were not available yet, industry observers indicated it was higher compared with the 643 units sold in April last year.

The company's sales is also expected to be boosted this year with the upcoming launches of the new Hyundai Elantra C-segment sedan and a more competitively priced variant of the seven-seater, 2.4-litre Santa Fe sport-utility vehicle.

Naza Kia Malaysia chief operating officer Datuk Hafiz Syed Abu Bakar said the company's sales volume in the first four months of 2011 was on par with the same period last year.

In the first quarter, the company's top selling model was the Forte (1,266 units), followed by the Citra (366 units) and Picanto (366 units).

“Our sales figure for April 2011 is estimated at 1,150 units, which is marginally higher than the 1,139 units recorded in April last year,” said Hafiz.

He said the company's vehicle bookings were higher in April 2011 compared with April last year owing to the hype from marketing initiatives for the new Sorento launched in December 2010 and the new Forte Koup and enhanced Forte sedan, both of which were introduced in March this year.

Hafiz said any shift in consumer preference from Japanese to South Korean marques can be attributed to the recent “Korean wave” sweeping the global car market.

Last year, Kia Motors Corp recorded an all-time high global sales volume of 2.1 million vehicles, which was a year-on-year growth of 26.5%.

“Some 400,000 Forte units were shipped out of South Korea last year. Also, the overwhelming global demand for Kia cars has taken a toll on vehicle supplies. In fact, Kia Motors will begin producing the new Optima at its plant in Georgia, United States, to meet global demand for this popular sedan,” said Hafiz, who is aiming for sales of 18,000 units in the country this year.

Meanwhile, industry observers indicated that UMW Toyota Motor had a higher sales volume last month (compared with the 7,303 units sold in April last year).

Honda Malaysia recorded sales of 3,603 units last month (a year-on-year dip of 9.5% compared with 3,980 units sold in April last year).

Local Nissan vehicle distributor Edaran Tan Chong Motor has not compiled its April sales figures, although it is expected that the Nissan Grand Livina multi-purpose vehicle will be the company's top seller for the first four months of this year, followed by the Teana and Sylphy sedans, and Navara pick-up truck.

Read the full article:
http://biz.thestar.com.my/news/story.as ... c=business
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Lower TIV seen

Postby admin » Mon May 09, 2011 1:59 am

Parts supply disruption may affect Japanese OEMs

CYBERJAYA: The Malaysia Automotive Institute (MAI) expects total industry volume (TIV) to drop as much as 3% this year following the shortage of components and spare parts due to earthquake that hit Japan in March.

Chief executive officer Madani Sahari said the disruption was likely to affect Japanese original equipment manufacturers (OEMs), which account for about 30% of total TIV.

“Those that will be heavily affected are the Japanese OEMs. We had a meeting with them a few weeks back,” he told StarBiz in an interview.

“So far, they say they have enough stock and inventories to survive on. They are monitoring it and will be able to know the situation by end-May, in June, or latest, by July.”

MAI is an agency under the International Trade and Industry Ministry that was established as the focal point and coordination centre for the development of local automotive industry.

Madani said MAI had regular meetings with local automotive players and OEMs.

“As of now, based on the current information that we have, we forecast TIV to drop by 2.5% to 3%. By July, as the Japanese players get a better evaluation of the situation, it will give us a better forecast,” said Madani.

“(But) Japanese being Japanese, I think they will find a way to resume production as soon as possible,” he added.

Total vehicle sales in Malaysia grew 13% to hit an all-time high of 605,156 units in 2010, surpassing the previous record of 552,316 units achieved in 2005.

The Malaysian Automotive Association (MAA) had forecast in January that the local automotive industry is expected to reach another all-time TIV high of 618,000 units this year but this may have already changed in light of the earthquake that hit Japan in March.

MAA usually has a media briefing in July to review the half-year TIV performance. It will also present its outlook for the remainder of the year and may or may not revise its (TIV) forecast for 2011.

Madani said national car companies Proton Holdings Bhd and Perusahaan Otomobil Kedua Sdn Bhd (Perodua) were unlikely to see any impact from the catastrophe that had hit Japan.

“We met with Proton and they said they were conducting a robust monitoring within (the group) and on their vendors,” he said, adding that Proton had implemented a “two-month frame” monitoring system as a counter-measure against any delay in production.

“This is so that if they have problems with components and parts, Proton will have two months to do something about it.”

Madani also cited recent news reports on Perodua stating that it expects its operations to fully recover by July. Both Proton and Perodua account for 60% of total TIV.

As only the Japanese makes were expected to be impacted, the slip in this year's TIV would be minimal, he said.

OSK Investment Research, in its recent report, said it expected a 5.1% year-on-year drop for TIV in 2011 due to the disruption caused by the Japanese earthquake.

Read the full article:
http://biz.thestar.com.my/news/story.as ... c=business
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