PETALING JAYA: The automotive sector’s complete trade quantity (TIV) is predicted to melt in 2023 on decrease gross sales expectation, after a probable record-breaking TIV efficiency pegged at 630,000-700,000 models in 2022, say analysts.
They opined the slower TIV projection is premised on the absence of the gross sales and repair tax (SST) exemption, in addition to slower financial progress that might weigh on automobile gross sales and earnings subsequent 12 months.
In its newest report, RHB Analysis expects TIV in 2023 to ease by 14% year-on-year (y-o-y) to 600,000 models.
“Our forecast has already accounted for the possible robust first quarter 2023 (1Q23), as firms rush to ship the SST-exempt orders earlier than end-March 2023,” it added.
The analysis home, which has a cautious outlook on the automotive sector, additionally mentioned: “We predict past the robust deliveries within the close to time period, considerations of a slower 2023 may proceed to weigh on the sector’s sentiment.”
For 2022, the Malaysian Automotive Affiliation (MAA) initiatives the trade’s TIV at 630,000 models, and 636,000 models for 2023.
In response to the MAA, the TIV for November rose 6% month-on-month (m-o-m) and seven% y-o-y at 64,404 models, bringing year-to-date car registrations to 642,000.
“As we count on robust car gross sales in December, we predict 2022 TIV will possible attain our 700,000 models forecast, outstripping the TIV file of 667,000 models in 2015,” famous RHB Analysis.
The analysis home mentioned it wasn’t stunned by one other robust month efficiency (in November) TIV, primarily lifted by Perodua (plus 11%) and Toyota and Lexus (plus 13%).
“Month-to-month TIV stays sturdy, pushed by the months-long order backlog since June 2022 and easing provide chain situations,” it identified.
With larger provide visibility, RHB Analysis mentioned auto executives have expressed their confidence in fulfilling the gross sales tax-exempt orders earlier than end-March subsequent 12 months.
12 months-to-date, Perodua has offered 251,000 models, and is on observe to exceed its 265,900 models goal for 2022.
Nevertheless, Proton’s 12% m-o-m decline weighed on the sector TIV, as its manufacturing additionally fell 12% m-o-m, again to a normalised degree.
RHB Analysis’s high picks within the sector are Bermaz Auto Bhd
(BAuto) with a goal value (TP) of RM2.55 and Sime Darby Bhd at a TP of RM2.80 respectively.
Kenanga Analysis, which has an “chubby” name on the sector, mentioned the most recent MAA’s November TIV figures got here in inside its expectations.
The analysis home targets the trade’s TIV at 680,000 models for 2022 and 690,000 in 2023 respectively.
“We imagine the chances are in favour of the MAA elevating its quantity alongside the way in which,” it added.
In 2023, Kenanga Analysis expects car gross sales to be underpinned by the continued supply of order backlogs to the tune of 350,000 models as at end-October 2022, which was unchanged in comparison with three months in the past.
This means that deliveries had been replenished with robust new bookings, particularly for engaging new fashions even within the absence of the SST exemption.
Moreover, car gross sales shall be supported by launches of latest electrical automobiles (EVs) that can benefit from the SST exemption and different incentives for EVs as much as 2023 for utterly constructed up and 2025 for utterly knocked down.
Kenanga Analysis additionally believes car gross sales will stay sturdy in 2023 supported by the reopening of the economic system, monetary help to the low-income group and subsidies on fuels, electrical energy and chosen meals objects to maintain the price of residing in verify, a comparatively steady job market and wholesome family steadiness sheets of the M40 group.
Its sector high picks are MBM Assets Bhd with a TP of RM4.45 and BAuto with a TP of RM2.65 respectively.
Hong Leong Funding Financial institution (HLIB) Analysis, in the meantime, is sustaining a “impartial” name on the sector because it expects TIV to slowdown in 2023.
That is regardless of the anticipated robust TIV restoration till 12 months finish, backed by the excessive order backlogs.
“We advise buyers to build up MBM with a TP of RM5 and DRB-Hicom Bhd with a TP of RM2.24, as we count on the nationwide unique gear producers to conquer the long run with potential progress from new export markets.
“We additionally like BAuto at a TP of RM2.35 for its robust steadiness sheet with excessive order backlogs lasting for over six months,” added the analysis home.