RHB Research has forecast a TIV of 730,000 units for this year.
PETALING JAYA: Carmakers from China are making strong inroads into Malaysia, according to total industry volume (TIV) data in 2024.
They have also put up a strong competition with attractive price cuts, which have spurred consumer interest, said RHB Research.
However, the competition is limited to the electric vehicle (EV) space as the completely-built-up (CBU) units are subject to a RM100,000 floor price.
There could be a pick-up in interest in the EV space since a tax holiday which had been in place is set to end after 2025, according to the research house.
“As CBU EVs will possibly be significantly more expensive after 2025, we think a surge in EV sales volume is likely to be seen this year.
“Choices of completely-knocked-down EVs remain limited as most EVs on the road are imported from China,” the research house said.
“As such, we anticipate a spike in demand for CBU EVs before the tax holiday ends.
“That said, the local EV market remains small – making up just 2.5% of car sales in 2024.
“Hence, it is unlikely that a surge in EV demand would materially impact TIV,” RHB Research added.
The research house forecast a TIV of 730,000 units for this year, which is a 11% year-on-year decline from the previous year due to the effects of a high-base.
There are also ongoing uncertainties over any potential implementation of a luxury tax and petrol subsidy rationalisation, it noted.
The research house’s top picks are Sime Darby Bhd
and Bermaz Auto Bhd, noting that the latter offers attractive valuations and dividend yields.
Sime Darby is well-positioned for the RON95 petrol subsidy rationalisation with its broad EV line-up.
Its stake in Perusahaan Otomobil Kedua Sdn Bhd would provides earnings protection amid intensifying competition among the non-national marques, the research house added.
