KUALA LUMPUR – Malaysia’s total industry volume (TIV) is projected to grow 10% year-on-year (y-o-y) to 580,000 on the back of a higher sales volume forecast by Proton and Perodua, driven by new model launches such as Proton’s X50 and Perodua’s D55L.
Proton is expected to notch higher sales of 20% y-o-y, while Perodua is projected to achieve a 13% growth.
In a note today, CGS CIMB said TIV in December 2020 rose 19.5% month-on-month (m-o-m) to 68,836 units due to higher sales across both the passenger and commercial vehicle segments, as consumers brought forward their purchases in anticipation of a December 31 expiry of a sales tax incentive.
“We expect the automotive sector to report a strong set of fourth-quarter 2020 (Q4 2020) results in February 2021, following the strong sales delivery in Q4 2020.
“We think the sector remains on track for an earnings recovery in 2021F (2021 full year), with a projected 60% y-o-y sector net profit growth (versus -39% in 2020F).
“Although the implementation of the movement control order 2.0 could lead to a lower TIV in Q1 2021 due to lower showroom footfall, we still expect TIV to pick up in Q2 2021 onwards, as we are cautiously optimistic of a stronger recovery in economic activities once the Covid-19 vaccine becomes widely available.
“We also expect the sector to benefit from the appreciation in the ringgit versus the United States dollar, as that will reduce distributors’ cost of imported complete knocked-down kits and completed built-up units.”
CGS CIMB has maintained its “neutral” rating on the automotive sector.
The Malaysian Automotive Association has projected TIV to increase to 570,000 this year from 529,000 a year ago – an 8% jump – driven by a recovery in economic activities, extension of the sales tax holiday to June 30 this year, and lower hire purchase loan interest rates. – Bernama, January 29, 2021
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