“Based on our channel checks, Perodua and Honda recorded an average 3% increase in selling prices, while Toyota recorded an average 6% increase compared to the tax holiday period.
“Meanwhile, Proton is absorbing the SST for vehicles registered in Sep in order to maintain sales momentum, while Bermaz is also reportedly absorbing the SST for vehicles booked prior to September,” it said in a note.
The research house maintained its Neutral rating on auto sector.
It expects the sector to deliver higher earnings in Q3’18 driven by stronger TIV due to the tax holiday, new model launches and favourable forex.
Nevertheless, it said the strong earnings potential for 2018 is already reflected in the sector’s valuation as it is currently trading at 15.9x CY19 price earnings ratio, which is above the last industry upcycle mean of 15x over 2010-2014.