RHB Research said it expects the TIV in the second half of the year to drop by 8% year-on-year.
PETALING JAYA: Total vehicle sales for the month of August dropped 2% year-on-year to 71,162 units, in line with analyst expectations that total industry volume (TIV) will be weaker in the second half of the year.
According to statistics by the Malaysian Automotive Association released yesterday, year-to-date August TIV was up 6% to 533,301 units.
This compared with 503,783 units in the previous corresponding period.
In a report, RHB Research said it expects the TIV in the second half of the year to drop by 8% year-on-year.
It said Perusahaan Otomobil Kedua Sdn Bhd (Perodua) may be an exception, given its affordability and value-for-money offerings.
In view of its revised financial year 2024 (FY24) Perodua sales volume assumptions, RHB Research raised its TIV forecast to 790,000 units from 740,000 units.
Its revised forecast translates to a slight 1% year-on-year decline in TIV.
It maintained its “neutral” call on the sector. Its top pick for the sector is Bermaz Auto Bhd
due to its attractive valuation and higher-than-sector average dividend yield of about 10%.
The key downside risks cited to its call include softer-than-expected orders and deliveries, as well as resurgent supply chain issues.
The opposite represents upside risks.
It also foresees a stronger third quarter 2024 (3Q24) TIV quarter-on-quarter (q-o-q), from a low base in 2Q24.
It said year-on-year, 3Q24 could be another strong quarter, as July TIV grew by 11% year-on-year thanks to Proton and Perodua as they posted growth of 14% and 13% during this period.
However, this may be dragged by weaker data from the non-national marques, given the intensifying competition as a result of new entrants, mainly the China carmakers.
While electric vehicles (EVs) are not spared from the competition with the advent of new models, they remain less popular mainly due to pricing.
Unless more affordable models are introduced or the price floor expires by end-2025, EV sales are not likely to have a meaningful impact on TIV, it added.
Major marques have seen declines in their order backlogs, with Perodua’s dropping to 100,000 from 128,000 at end-December 2023 and Toyota’s decreasing to 20,000 from 28,000 over the same period.
However, the backlog was rather stable q-o-q, likely due to lower total production volume during the quarter.
Despite Perodua targeting a sales volume of 330,000 units this year (flattish year-on-year), its year-to-date sales volume growth of 17% points towards the national carmaker potentially achieving another record high sales volume in 2024.
Therefore, it revised upwards its 2024 Perodua sales assumption to 345,000 units from 330,000 units.
