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National auto brands to fare better in 2023, says CGS-CIMB Research

Publish date: Mon, 27 Mar 2023, 10:32 AM

KUALA LUMPUR: The recent strengthening of the ringgit against the US dollar should help to cushion the impact from lower car sales volume projection in 2023, said CGS-CIMB Research.

The research house projects a lower year-on-year (YoY) total industry volume (TIV) delivery of 665,000 in 2023 from 720,000 in 2022.

The firm said this is mainly due to the expiry of the sales and service tax (SST) holiday grace period from April 2023 onwards and risk of macroeconomic headwinds. 

"Nevertheless, we expect national brands to fare better than the non-national segment in 2023. 

"For example, Perodua and Proton are targeting 11 per cent and 8 per cent YoY sales volume growth in 2023 on the back of high backlog orders from 2022 and new launches, such as Axia and Proton X90. 

"Meanwhile UMW-Toyota has set a lower YoY sales volume target of 93,000, while Honda projects a flattish sales volume of 80,000 in 2023," it said.

TIV in February grew 27 per cent month-on-month (MoM) due to more working days than in Jan, amid Chinese New Year (CNY) festivities. 

The Malaysian Automotive Association (MAA) expects higher TIV delivery MoM in March 23 as automakers' push to fulfill backlog orders ahead of the sales and service tax grace period delivery deadline on March 31, 2023.

CGS CIMB Research said the firm sees a higher TIV in March 2023 as automakers push to fulfill backlog orders but expect a softer TIV in the second quarter (Q2) 2023 post-SST exemption grace period expiry.

"We stay Neutral on Malaysian Auto, with Bermaz Auto Bhd as our sector top pick," it added. 

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