HLIB sees stronger car sales in H2

KUALA LUMPUR: New vehicle sales will be stronger in the second half on improved consumer sentiments and year-end promotional campaigns, said Hong Leong Investment Bank (HLIB).

Hence, HLIB has maintained its total industry volume (TIV) forecast of 600,600 units this year.

It, however, has a “neutral” rating on the sector given the currency fluctuation affecting cost structure and margins.

HLIB expects national car brands to sustain their sales volume this year.

“We expect higher sales volume this month compared with last month, on the back of the continuation of aggressive promotions by carmakers for the Merdeka month,” it said.

HLIB said the risks level in the automotive sector included the prolonged tightening of banks’ hire-purchase rules, a slowdown in the Malaysian economy, global automotive supply chain disruption and sudden increases in fuel prices and interest rate.

According to the Malaysian Automotive Association (MAA), new car sales for last month decreased 3.4 per cent, or 1,718 units, from the preceding month.

The decrease was attributed to post-Hari Raya holidays and technical glitches in e-daftar system, which had affected vehicles’ registration process.

However, sales volume was 6,070 units last month, or 14 per cent higher than the same month last year.

Similarly, year-to-date TIV expanded 4.7 per cent to 333,010 units from 317,966 units over the same seven months of last year.

MAA expects sales volume for this month to be slightly better than last month, driven by ongoing promotional campaigns by car companies and fulfilment of back orders as e-daftar system is expected to return to normalcy.

In terms of production, the number expanded to 43,952 units last month from 39,097 units in the same month last year. For the first seven months, the number stood at 299,270 units, down from 302,060 last year.