Malaysian automotive sales to slow down this year

KUALA LUMPUR: Malaysia’s total industry volume (TIV) of new motor vehicles is not expected to spike this year as disruption in the supply chain as a result of March earthquake in Japan may prompt players to cut production, AmResearch says.
    
“Broadly, we downgrade our TIV forecast to 590,027 units from 626,336 units previously. We now expect TIV to decline 2.5% in 2011 versus an expected 3.5% rise previously,” the research house said today.

Last year, total TIV in the country hit a new record of 605,156 units,  replacing the last one in 2005 which was 552,361 units.




AmResearch said UMW Holdings could be one of the worse affected, given that its plants at Toyota and Perodua were largely controlled by Japanese partners which adopted strict just-in-time inventory management system.
    
“We suspect Perodua and Toyota will likely need to manage sales deliveries in order to maintain sufficient inventory levels to keep their plants running,” it said.

It added that Perodua’s MyVi replacement model launch was facing a potential delay from earlier scheduled in April.

Toyota Japan recently already indicated that assembly disruptions may thin supplies of vehicles into the third quarter but Proton and Nissan are better insulated from supply shortage.

As a result of this, AmResearch said it trimmed 2011 earnings projection across the board by 6% to 12% also to reflect crimped margins from reduced economies of scale and lower sales. 

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