KUALA LUMPUR, Jan 28 (Bernama) -- Kenanga Investment Bank Bhd (Kenanga IB) has maintained its 2025 total industry volume (TIV) forecast of 805,000 units for the automotive industry, supported by forward buying interest following the deferment of new excise duty regulations.
In a note released today, the investment bank said Perusahaan Otomobil Kedua Sdn Bhd (Perodua), which holds a 44 per cent share of the TIV market, is likely to benefit the most.
It said this advantage stems from Perodua’s high localisation rate, which could have otherwise led to a 10 per cent to 30 per cent increase in the prices of locally assembled vehicles, attractive new model launches, rising household incomes, and a stable labour market.
However, Kenanga IB said the same could not be said for the premium segment as its target customers, the upper tier M40 and T15 groups, may hold back from buying new cars, downgrade to smaller cars, or switch to hybrids and electric vehicles (EVs) to cut their fuel bills upon the introduction of fuel subsidy rationalisation.
“In general, the industry’s earnings visibility is still good, backed by a booking backlog of 150,000 units as of end-December 2024.
“More than half of the backlog is made up of new models, alluding to the appeal of new models to car buyers. This trend is likely to persist throughout 2025 given a strong line-up of new launches,” it added.
Furthermore, Kenanga IB said vehicle sales will also be supported by new battery electric vehicles (BEVs), which enjoy sales and service tax exemption and other EV facilities incentives up until 2025 for completely built-up (CBU)and 2027 for completely knocked-down (CKD).
“We expect more favourable incentives from the government, which has set a national target for EVs and hybrid vehicles of 20 per cent of TIV by 2030 and 38 per cent by 2040.
“Meanwhile, the government will speed up the approval for charging stations. The number of proposed charging stations is currently at 4,235 (3,354 built to date), and this should more than double to 10,000 by end-2025,” it said.
Meanwhile, RHB Investment Bank Bhd remains cautious in its sector outlook due to the ongoing price competition in the non-national segment and softening order backlogs.
It said uncertainties over the implementation of a luxury tax and petrol subsidy rationalisation also continue to persist.
Hence, it has maintained its “neutral” stance in the automotive sector with an unchanged 2025 forecast TIV of 730,000, anticipating softer TIV as the high-base effect kicks in.
“We also do not see any compelling factors for 2025 auto sales to be maintained at the current elevated levels,” it added.
-- BERNAMA
