CGS-CIMB cautiously optimistic on auto sector TIV recovery in 2H21F

By , in Economy Nation on .

KUALA LUMPUR, June 14 — CGS-CIMB Research is cautiously optimistic about the local automotive sector’s total industry volume (TIV) recovery in the second half of 2021 (2H21F), driven by another extension in the sales tax holiday.

In a note today, the research firm said the government has extended the sales tax holiday for completely built-up (CBU) and completely knocked-down (CKD) passenger vehicles from June 30, 2021 to Dec 31, 2021, under the PEMERKASA Plus package.

“Apart from the sales tax holiday, we expect outstanding orders from popular models, such as Perodua Ativa and Proton X50, to drive sales volumes in 2H21F.

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“For example, Proton received over 40,000 bookings for the X50 as at end-Mar 21, but it only delivered 16,000 as of May,” it said.

Meanwhile, UMW Holdings reported that demand for Perodua Ativa remains healthy in May, with an average daily booking of 290 units since its launch on Mar 3, 2021.

Hence, CGS-SCIMB Research believes there will be a healthy order backlog going into 2H21F.

“In addition, we expect the potential introduction of a new Toyota Corolla Cross CKD and Honda City hatchback in 2H21F to propel sales volumes in the non-national segment.

“Assuming no vehicles are delivered in June 21, our 580,000 TIV forecast for 2021F implies an average of 57,000 TIV/month in July-December 2021F, ” it added.

It said the TIV forecast remains achievable unless the government decides to extend the Full Movement Control Order (FMCO) to July.

Overall, CGS-CIMB Research said it retained its “neutral” rating on the Malaysian auto sector, with Sime Darby, UMW Holdings and Bermaz as its preferred picks.

BERNAMA

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