PETALING JAYA – The competition between Proton and Perodua is set to intensify as both companies will be pulling out all the stops to boost margins and regain market share with their first sport-utility vehicle (SUV).
Additionally, both national carmakers have unique goals to achieve with their SUVs, according to AmInvestment Bank Research.
“Perodua will focus on sales while Proton will focus on improving consumer perception. Proton will rely on the SUV to test the various operational reforms and processes that are being introduced to win back consumer confidence,” the research house said in a recent report.
“We believe that the X70 requires a strong success story in the home market before expanding regionally. Perodua will follow suit and target the more affluent segment where the financing options are said to be more secure.
“Both players are looking to position themselves on more formidable ground by reducing their dependence on volume over time.”
According to data from the Malaysian Automotive Association (MAA), Perodua sold the most vehicles in 2017 with 204,887 units, but its market share dropped marginally year-on-year to 35.5% from 35.7% in 2016.
Proton, the third highest-selling car company, sold a total of 70,991 vehicles in 2017, with market share dropping to 12.3% that year from 12.5% in 2016. Both Perodua and Proton’s market shares have been taking a beating over the years due to stiff competition from non-national makes.
Bookings for the Proton X70 had exceeded 15,000 units since September. They climbed up to an average of 200 to 300 per day since the vehicle was launched on Dec 12.
The model is the first collaboration between Proton and Chinese automaker Zhejiang Geely Holding Group.
Last week, Perodua announced that bookings were opened for its Aruz SUV.
The company is confident of selling an average of 2,500 units monthly or 31,200 units by end-2019.
An industry observer said the introduction of the SUVs would offer variety and help complement both companies’ existing product range.
“It’s a step in the right direction for the national carmakers. However, it cannot be a one-product strategy, as the SUV segment is small compared with the passenger car segment – which is where the volume is.”
Meanwhile, AmInvestment Bank Research is projecting a total industry volume (TIV) growth of 2% to 600,000 units for 2019.
“A slate of new models that coincide with the pre-Chinese New Year buying will generate excitement at the beginning of the year in an otherwise mellow market.”
The research house noted that growth in 2019 would depend on the performance of volume-oriented players, namely, Perodua, Honda, Toyota, Nissan and Mazda.
“Of these, we note that Mazda has had a stupendous year (as its monthly sales rebounded to an average of 1,300 units per month from only 811 in 2017), followed by Perodua (benefiting from the late entry of the Myvi in December 2017), while Honda, Toyota and Nissan are set to round up a decent year that largely leaned on the tax holiday.”
Kenanga Research, meanwhile, expected TIV growth to be flat at 590,000 units.
“We believe that the absence of a one-off 2018 tax holiday will be netted-off by interesting new launches in 2019, which includes the Perodua SUV Aruz, Toyota Vios, Toyota Yaris Hatchback (tentative) and competitive models by Honda, Nissan, Mazda and Proton.”
TIV hit an all-time high of 666,674 units in 2015, then dropped almost 15% in 2016 before contracting further last year to 576,635 units.
For 2018, MAA expected TIV to hit 585,000 units. The association will announce last year’s TIV numbers later this month.