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Perodua Aruz could increase competition in non-national B-segment market

By NSTP AYISY YUSOF – January 16, 2019 @ 5:17pm

Aruz model economic yet elegance SUV.

Perodua is also targeting between 2,000 and 2,500 units of monthly sales.

KUALA LUMPUR: Perusahaan Otomobil Kedua Sdn Bhd (Perodua) foray into the sport utility vehicle (SUV) segment will likely impact sales of non-national B-segment, lower-end multi-purpose vehicle (MPV) as well as crossover segments.

At a conservative 24,000 annual volume, Perodua’s recently launched Aruz model is estimated to account for 10 per cent of Perodua’s 2019’s total industry volume (TIV).

MIDF Research said the arrival of new Perodua’s SUV, Aruz is likely to increase competition in the local automotive market, backed by the manufacturer’s competitive prices between RM73,000 and RM78,000.

“Of the three major non-national B-segment, Honda will be impacted the most followed by Nissan and Toyota. The models in Honda’s line-up such as the BRV, City and Jazz overlap with the Aruz’s pricing as these models account for 38 per cent of Honda’s TIV,” it said in a research note today.

The research house said for Nissan, the Almera is the main model that will be impacted by Aruz, accounting about 30 per cent to 35 per cent of Nissan TIV.

Meanwhile, the latest generation Toyota Vios model (1.5J Auto) is priced at RM77,000 and Toyota Avanza priced at RM74,000 to RM80,000 could be impacted too.

“Overall, Toyota’s models that could see increased competition from the Aruz account for just 12 per cent of its TIV. All the models Vios and Avanza have an estimated monthly volume of 4,685 units collectively.

“This is a sufficiently large potential market versus the Aruz’s monthly sales target of 2,000-2,500 units.”

MIDF Research said Proton X70 entails different price points of RM100,000 to RM124,000 and will only pose little competition with Aruz.

“We expect the X70 to encroach into the share of non-national B-segment SUVs, C-segment sedans and C-segment MPVs. Of the 3 key non-national players, Honda could be impacted the most.”

MIDF Research said the X70 overlaps with the Civic and HRV’s price points as these models account for about 29 per cent of Honda’s TIV.

It added Mazda’s Mazda 3 model and the CX3 could be also impacted as these models account for 19 per cent of Mazda TIV.

Further, MIDF Research said Perodua TIV might hit new record as its 2018’s TIV recorded at 227,240 units or an 11 per cent Year-on-Year (YoY), although the sales was partly driven by temporary strength from the Jun-Aug tax holiday period.

“We have revised our Perodua’s 2019 TIV higher to 241,000 units from 219,000 units, previously. This represents a six per cent YoY growth, after factoring in the Aruz.”

MIDF Research said UMW Holdings Bhd and MBM Resources Bhd also come into picture, as each of the company owns about 38 per cent and 22.6 per cent stakes in Perodua.

“MBM provides more earnings leverage into the play as Perodua accounts for over 90 per cent of MBM’s earnings.

“MBM’s other units such as its Perodua dealership (via 51 per cent-owned Daihatsu Malaysia Sdn Bhd) as well as its parts manufacturing units are spillover beneficiaries of the Aruz.”

Meanwhile, Perodua is estimated to account for 50 per cent of UMW’s financial year ending September 30, 2019 (FY19) earnings as the company owns about 51 per cent of UMW Toyota (UMWT), which is expected to benefit from its new Bukit Raja plant.