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Analysts say transparency important for the growth of the auto industry [09-07-2012]  
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The lack of authorised vehicle sales data could have an adverse impact on various industry stakeholders and potential investors, say analysts and industry observers.

It was reported that a few car companies, which are market leaders, had stopped submitting their monthly figures to the Malaysian Automotive Association (MAA), citing the Malaysian Competition Act 2010 as a reason.

“It will have an adverse impact. Analyses and forecasts will be uncertain if based on assumed information. Overall it could result in a skewed market condition where people are not open about sharing their performance with each other,” said Frost & Sullivan partner and head for automotive and transportation practice, Asia-Pacific, Kavan Mukhtyar.

RHB Research analyst Alexander Chia shared the sentiment.

“If more companies followed suit, then the value of the monthly MAA sales data would be somewhat diminished.

Holding back: An industry observer says that the lack of vehicle data can affect potential foreign investors that are keen to invest in the Malaysian automotive industry.

“The reduction in the granularity of the sales data will reduce market visibility,” he said.

An industry observer said:“If there is no authority to make automotive companies submit their vehicle sales figures, how will anyone gauge the size of our car industry?”

The specific reason for the automotive companies stopping the submission of their sales data is still unclear. Some of them perceived that with the figures published, those with high sales volumes could influence the market.

“In our opinion, revealing model sales data in itself does not lead to monopolistic influence.

“It's important that the industry develops further with a spirit of openness and transparency.

“Withholding information will create an environment which may not be good for the long-term development of the industry,” said Kavan.

According to previous reports, Mercedes Benz and BMW had stopped submitting their vehicle sales data. MAA president Datuk Aishah Ahmad told StarBiz in a report last week that Toyota, too had done the same.

“Yes, some members have stopped giving data since last month but we are appealing,” she was quoted as saying, adding that if the MAA was unable to produce specific sales numbers, it would need to publish an aggregate figure of the vehicle sales that were sold monthly.

Aishah said that the MAA was seeking an exemption from complying with the Malaysian Competition Act 2010.

Chia said it was unclear how the practice of submitting historical sales data could undermine competition in the Malaysian context.

“It has been reported that MAA will apply for a waiver from the Malaysia Competition Commission on this matter.

“As it directly affects MAA members and the MAA is the right body to take the lead in resolving the issue,” he said.

Each month, the MAA gathers information on vehicle production and sales by make and model from member companies. The figures represent the total number of vehicles sold each month and the information is relied upon by not only car companies, but also insurance companies, media companies and analysts.

One industry observer reckoned that the lack of vehicle data could affect potential foreign investors that were keen to invest in the Malaysian automotive industry.

“There won't be an accurate gauge of how big the local automotive industry is and how much it is growing,” he added.

Kavan said the lack of automotive data would not have much direct impact on potential investors, as he believed summary information would be still be available.

“In addition, a serious investor would find a way to get reliable information through other sources and methodologies.”

Chia said the lack of proper data would make it difficult to gauge the size of the various vehicle sub segments of the local automotive industry.

“The absolute size of the market will be known; it's just that there will be less visibility on the size and sales performance of the various sub-segments,” he said.

Source:THE STAR
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