CGS-CIMB Research has raised its total industry volume forecast for this year to 665,000 vehicles, up by 25,000 from its previous forecast.
PETALING JAYA: Owing to the record breaking automotive sales in 2022, CGS-CIMB Research has raised its total industry volume (TIV) forecast for this year to 665,000 vehicles, up by 25,000 from its previous forecast.
This forecast is still a 7.7% year-on-year drop, primarily due to the expiry of the sales and service tax holiday grace period and macroeconomic headwinds amid an uncertain global recovery.
For comparison, the Malaysian Automotive Association (MAA) is projecting a lower TIV of 650,000 vehicles in 2023, owing to the ongoing supply constraints and weakening consumer confidence on the back of rising interest rates.
In a report on the automotive sector, CGS-CIMB Research said that some automakers, to combat inflationary pressures including rising material, component and electricity costs, have raised car prices on Jan 23.
“We see the government’s decision to defer new open-market value excise-duty regulations by two years from 2023 to 2025 as helping to contain the rise in average selling prices and sustain demand in 2023,” CGS-CIMB Research noted.
Albeit a lower TIV outlook, the research outfit expects national brands Proton and Perodua to perform relatively better than the non-national segment, in view of the multiple new launches by national brands in 2023.
In December 2022, the automotive industry reported a record monthly TIV of 76,657 units, almost 18% month-on-month (m-o-m) growth, driven by stronger demand from the passenger and commercial vehicle segments as automakers ramped up production and deliveries to fulfil high backlog orders.
Consequently, for the final quarter of 2022 (4Q22), the sector posted a record quarterly TIV of 203,758 units, exceeding the previous record of 190,056 units in 4Q21.
This has brought the industry’s TIV for 2022 to a new record high of 720,658 units, a 42% year-on-year (y-o-y) jump.
This number has beat the research house’s and MAA’s sales forecast by 3.7% and 14.4%, respectively.
“The jump in TIV in 2022 was driven by higher sales in the non-national segment, recording a 46.3% y-o-y growth that was led by Japanese marques.
“Meanwhile, national brands Perodua and Proton delivered a 38.4% y-o-y growth,” it noted.
The research house attributed the record TIV sales in 2022 to the base effects coming from the negative impact of the Covid-19 lockdowns in June to August 2021.
Apart from that, the extension of the grace period to March 31, 2023, to register cars that were booked before June 30, 2022, is among reasons for the robust sales in 2022, it added.
On the near-term outlook, the research firm expects a lower m-o-m TIV for this month, owing to fewer operating days on the back of the Chinese New Year holidays.
CGS-CIMB Research, which maintained a “neutral” call on the auto sector, is expecting stronger quarterly earnings in the 4Q22 results filing, in view of a record TIV delivery.
