KUALA LUMPUR: MIDF Research (MIDF) has maintained its positive stance on Malaysia’s automotive sector, premised on the expectation that the total industry volume (TIV) will remain elevated, given the large backlog of orders and the still strong new booking momentum.
The research house noted that Perusahaan Otomobil Kedua Sdn Bhd (Perodua) is targeting another record year in 2023 with a sales target of 314,000 units, which is 11 per cent higher than the record high of 282,019 units that it achieved last year.
As Perodua accounts for about 40 per cent of the industry’s total TIV, its TIV will have a bearing on the overall industry, it said.
“In line with its bullish sales outlook, Perodua expects the industry’s 2023 TIV to hold up above 700,000 units, which is higher than the Malaysian Automotive Association’s (MAA) forecast of 650,000 and our forecast of 678,000 units,” MIDF said in a research note yesterday.
It noted that Perodua’s outstanding orders currently stand at 220,000 units, which already makes up 70 per cent of the 2023 sales target.
“This will be boosted further by the launch of the new Axia this month.
Over 90 per cent of the outstanding bookings are post-tax holiday bookings, signalling a strong underlying demand momentum despite the expiry of the tax holiday on June 30, 2022,” it said.
The positive view on the industry is further underpinned by a favourable foreign exchange environment, improving underlying macro backdrop such as easing inflation, improving labour market to drive domestic consumption and launches that are set to reaccelerate following delays in the past year.
Additionally, the industry’s performance will be boosted by the more gradual pace of interest rate normalisation, it said. – BERNAMA
