KUALA LUMPUR: RHB Research is maintaining its Neutral call on the automobile sector and named Tan Chong Motor Holdings Bhd
and DRB-Hicom Bhd as its top picks. The research house said on Monday the industry performed better than expected with Malaysian Automotive Association's (MAA) data revealing total industry volume (TIV) for April reached 52,489 units. Though it contracted 8.9% on-month contraction, it was up 9.9% on-year. "Cumulative sales for the four months to April reached 210,153 units that was 12.8% higher on-year. The on-month decline was attributed to consumers taking a wait-and-see position ahead of the General Elections." RHB Research said the cumulative year-to-date (YTD) jump was attributed to the combined impact from supply constraints and the newly introduced stricter financing guidelines in the previous corresponding period. "The election manifesto of both coalitions had expressed intentions to lower car prices, although the Pakatan Rakyat manifesto contained explicit pledges to eliminate excise duties within five years. This could have had significant repercussions for the automotive industry. "TIV is expected to trend higher in the months ahead with the macro environment remaining supportive of higher consumer spending helped by low interest rates and an attractive pipeline of new models," it said. RHB Research said Perodua sales grew 24.2% on-year due to its S-Series variants while Proton sales only rose 5.6% on-year. Nissan and Honda gained 76.1% and 260% on-year of sales respectively. Toyota however declined 15.9% on-year.
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