"Cuti Peristiwa" and TIV

Holiday is something almost everybody will look forward. Ad hoc or additional holiday, or “Cuti Peristiwa” as we now getting used to, is even more interesting. Previously, I wrote about how December 2017 were shorter by 2 working days compared to December of any other year before. Some might ask, so what? It is just one or two days lesser.

To public at large, it was nothing. To the automotive industry, especially on market side, it makes lots of different, especially from the perspective of the TIV. Scheduled public holidays are not too bad, but the unplanned holiday could be quite damaging to Sales, especially if it is too often and if declared just before or after the weekend.

In 2017, there were two months that went with these Cuti Peristiwa. First was in April and  second was in September. Trend-wise, the first three months of 2017 was far better, with TIV of almost 141,000 units compared to 131,500 units during the same period in 2016. However, the following three months of 2017 shows a very weak momentum compared to the same period in 2016 with TIV subtracted by 700 units. Despite lower sales in January to March in 2016, the market picked up steadily in April, May and June. In 2017, the trend was totally opposite with sales started to slow down after April.

There was an unplanned holiday declared in April 2017, resulting in working days for the month reduced to 18 days, 3 days shorter than the same period in 2016. The “dominos” of the one day “Cuti Peristiwa” to the market normally lasted for at least two or three months after.

In September 2017, another unplanned holiday was announced to celebrate our winning in the Sea Games that Malaysia hosted. The TIV dropped from 51,700 in August to 41,000 units in September. In 2016, the TIV for September was at 48,100 units. Similarly, although there was growth in October up to December 2017, but the momentum was very weak to match the growth and TIV recorded during the same period in 2016.

It is difficult to explain the exact relationship of the 1 day “Cuti Peristiwa” to the market, other than "it is a holiday". But, trend-wise, that 1 day added to  already a bit too many scheduled holiday did affects the overall performance of the market, unfavourably.

Perodua also suffered the same fate as a result of the unplanned holidays. Since Perodua is a volume player, the impact was even more severe compared to other OEMs. In April 2017, Perodua recorded a subtraction of 5,100 units at 14,400 units from 19,500 units recorded in March. In 2016, 14,900 units were registered in April, lower by just 2,700 from the month before. 


Similarly, though there was a growth post April but the momentum was weaker compared to the same period in 2016. Similar pattern also observed in September 2017 when Perodua only managed to register 14,400 units, a drop of 4,200 units compared to the previous month and 2,700 units lower than the same period in 2016. Worst, the recovery in the following months until year end was somewhat distorted. Typically, 4th quarter result contributes the highest percentage to Perodua annual performance at over 27 percent. In 2017, it only contributes around 26 percent.

For me, apolitical as I wish to be, I have to agree to YAB Tun Dr Mahathir’s recent critic on too many holidays declared "is not good". Or perhaps, in the future, the “cuti peristiwa” should be differed and implemented with sufficient notice and not as ad hoc as it was in the past.

Not a Jaguh Kampung We Are

Proton recently announced that it sold a total of 70,991 units in 2017, 1,300 units or 1.8 percent lower than what they registered in 2016. They attributed the decline to poor fleet sales due to lower taxi orders in 2017. On the retail side, sales improved by 2.5 percent to 68,184 units due to higher Persona sales, which recorded 27 percent growth over 2016’s performance. More than 30,000 units of Saga sold in 2017.

Meanwhile, Frost & Sullivan has also released their report on 2017’s performance and 2018’s forecast. On 2017, Frost & Sullivan assumed* that the TIV to be around 590,000 citing that higher demand for Passenger Vehicles were resulted from recovering economy and rising consumer confidence. On 2018, they forecasted that there will be a 2 percent growth in TIV with 601,000 units expected to registered this year, out of which, 540,000 units coming from Passenger Vehicle (PV). According to them, increasing in disposable income and strengthening ringgit would be the driver for the growth in 2018. They also cited that BNM continuous efforts to improve the quality of loans will dampen the growth to some degree.

* MAA has yet to announce the 2017 result.

Interestingly, somebody also shared these facts on Perodua.

1. Perodua is holding 40.1 percent market share of Malaysian Passenger Vehicle segment in 2017, grew by 1 percent from 2015.
2. Perodua is ranked number 4 in ASEAN market in terms of sales, trailing behind popular brands such as Toyota, Honda and Mitsubisi. 

For a mere 25 years local breed company, kudos to Perodua. We are not that "Jaguh Kampung" after all.

For me, we should continue to improve, yet stay humble.

December 2017

Comparing with December of the last two years before 2017, when TIV were above 60,000 units monthly, December 2017 sales was relatively low. Pending official figure by MAA, the closing figure for December 2017 is expected to be around 54,400 units only. This could be the lowest ever figure for December month since 2012.

Typically, December has always been a slow month due to the influence of used car prices in Malaysia. In a matter of less than 30 days, the resale value of the car will drop by 15 to 20 percent as the year changed from the stated manufacturer year on the registration card. The situation resulted into high carry over stocks by the OEMs, which forced for huge discount to be offered at the beginning of the following year. Since 10 years or so ago, most OEMs started to offer the discount in December to reduce the carry over stocks, hence improving the TIV for month. In 2017, things were a bit different though.

Notably, the absent of special Year End offering by few leading brands who have done well in their sales in the earlier months of the year somewhat reduces the foray in December, unlike in the previous years.  Market is still affected by the aftermath of the recent flood in Penang. This somewhat adds to the contraction too. In  December 2017, working day was 2 days lesser than the previous year, which ironically gave significant impact to the registration volume. In fact, within the last many years, only December 2017 has less than 20 working days.

Perodua’s figure in December 2017 was at 20,180 units reflecting 37.1 percent market share. The Jom Beli Campaign helps to push for slightly higher volume as compared to November. In 2016, Perodua created a history with more than 24,000 units registered in December. Just like in the previous year, we received strong supports from our bankers, but rather unfortunate, we were unable to convert those Letter of Undertakings (LOU) for new Myvi as demand was overwhelmed the supply. Still, 5,800 units of Myvi were registered in December.

Again, despite all the challenges, Peroduan being Peroduan, they fought hard to the last hour to close the month and the year with the highest registration and market share for the year.

For me, am always proud being with this special team...