Research firms remain bullish on auto sector

This is driven by the ongoing aggressive promotional campaign and continued delivery of backlogged booking of all-new launches, especially Perodua Ativa and Proton X50. ― Bernama pic

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KUALA LUMPUR, April 22 ― Kenanga Research expects the total industry volume (TIV) for the automotive sector in April 2021 to match that of March 2021 of 63,878 units.

This is driven by the ongoing aggressive promotional campaign and continued delivery of backlogged booking of all-new launches, especially Perodua Ativa and Proton X50.

For March, it said both month-on-month (MoM) and year-on-year (YoY) sales growth revved stronger, ignited by exciting all-new launches, especially the highly popular all-new Perodua Ativa, rush of deliveries for players with the financial year ended March 2021, ongoing sales and services tax (SST)-exempted sales promotion, and lower base in March 2020 from the first movement control order (MCO).

“We believe the new volume-driven launches such as Perodua Ativa, Proton X50, Honda City, and Nissan Almera could help spur sales along with overflowing backlogged bookings and further boosted by the extension of SST exemption to June 30, 2021, seasonal promotions and more new launches expected in the second half of the year.

“Overall, 2021 could potentially be a better year with incentives programme under the National Automotive Policy (NAP) 2020, positive impact from BNM’s overnight policy rate (OPR) cut and pre-emptive measures that soften the Covid-19 impact,” it said in a research note today.

Maintaining “overweight” call for the sector with 2021 TIV target of 585,000 units, Kenanga Research said an expected global growth recovery and the impact of the large fiscal stimulus on domestic economy would result in a projected gross domestic product growth rebound of 6.5 per cent this year.

In a separate note, MIDF Research also maintains its “positive” stance on the automotive sector, leaving its 2021 TIV forecast of 550,000 units unchanged at the moment.

“We see scope for further upside to our numbers, notwithstanding potentially weaker sales in the immediate period post-expiry of the tax holiday in June 2021.

“Despite the temporary supply constraints, demand remains strong with one-three months’ worth of booking bank on average, backed by the extended tax holiday, while the stronger ringgit further underpins the sector’s earnings recovery this year,” it said. ― Bernama

Source: Malay Mail