CIMB Research raised its 2024 TIV forecast by 5.2% to 790,000 units.
PETALING JAYA: The substantial backlog of orders, particularly from the national car segment, is anticipated to drive sales volumes in the final two months of 2024. This is expected to bring the 2024 total industry volume (TIV) somewhat in line with that of 2023.
Given the improving outlook for the automotive sector, CIMB Research raised its 2024 TIV forecast by 5.2% to 790,000 units.
This followed the upward revision by the Malaysian Automotive Association (MAA) of the 2024 TIV forecast to 800,000 units from an earlier projection of 765,000 units, citing robust domestic demand, supportive interest rates and healthy backlog orders.
MAA’s revised projection aligned closely with the 2023 TIV of about 799,700 units.
“Our channel checks indicate that Perodua’s and Proton’s backlog orders stood at approximately 100,000 and 24,000 units, respectively, as at the end of September 2024.
“We believe this will drive sales volumes in November and December, especially when coupled with ongoing promotional campaigns,” CIMB Research said.
“As a result, we have also raised our 2024 TIV forecast by 5.2% to 790,000 units, driven by higher sales contributions from national brands and the delay of the implementation of the RON95 petrol subsidy rationalisation plan to beyond 2024,” the brokerage explained in its report yesterday.
MAA recently revealed that TIV increased 20.3% month-on-month to about 69,900 units last month from 58,100 units in September, driven by strong recovery in the national passenger vehicle segment. For the 10 months to October 2024, TIV grew 2.4% year-on-year to 664,000 units.
CIMB Research noted that MAA expects the strong sales momentum to continue this month on the back of year-end promotional campaigns.
The brokerage reiterated its “overweight” call on the automotive industry, with Sime Darby Bhd
and Bermaz Auto Bhd (BAuto) as its top picks.
CIMB Research stated that while it expected resilient demand to sustain TIV growth in 2024, the industry’s outlook for 2025 appeared challenging, primarily due to the potential revision of the open market value (OMV) calculation method, which could lead to higher average selling prices for new vehicles.
“MAA previously estimated that a potential revision to the OMV calculation could increase the average selling prices of locally assembled vehicles by 8% to 20%.
However, implementation of the revised OMV calculation has been deferred multiple times, with the latest deferment extended until Dec 31, 2024,” it said.
Further, CIMB Research said the potential removal of the RON95 petrol subsidy in mid-2025 could impact the 2025 TIV.
“However, this is likely to primarily dampen TIV in the premium to luxury market segment, as the government intends to target the top 15% of users by income level. However, we believe the removal of the RON95 subsidy could accelerate the adoption of battery electric vehicles in the Malaysian market,” it said.
Meanwhile, TA Research maintained a “neutral” outlook on the automotive sector.
“None of the automotive companies under our coverage have revised sales targets at the time of writing. We put our sales volume assumptions under review pending more guidance from the management during the results briefing,” the brokerage said.
TA Research had a “sell” call on MBM Resources Bhd, and recommended “hold” on BAuto and Sime Darby.
