Double-digit revenue expansion likely for automobile sector

PETALING JAYA: The nearby automotive sector is anticipated to accomplish double-digit profits advancement in 2021, as analysts reckon that development will be spurred by the expected economic recovery and the ongoing tax exemption on cars.

This is in distinction with the Malaysian Automotive Association’s (MAA) modest projection of an 8% progress for automobile sales this year.

TA Securities, in a report yesterday, specific 18.4% calendar year-on-year (y-o-y) advancement to 627,000 models this 12 months.

“We anticipate the automotive sector to perform superior in 2021 as need outlook has improved with the extension of the profits tax exemption. This is coupled with other constructive drivers, these types of as economic recovery and accommodative curiosity level environment.

“Besides, we think the new 2020 and 2021 products, particularly the Proton X50, Perodua sports-utility auto (SUV), new Honda Town, Nissan Almera Turbo, Toyota Vios and Yaris, coupled with the improve in other totally-knocked-down products would assistance to drive product sales greater this yr.”

UOB Kay Hian expected an 11% y-o-y advancement to 585,000 models when compared with 2020’s small foundation.

“The movement handle get (MCO 2.) effects is anticipated to be much less severe than the first round. The whole vehicle offer chain is operating as typical and the product sales tax waiver extension is probable to offset some of the damaging effect.

“However, we assume overall business volume to weaken in the 2nd 50 % of 2021, after the 12 months-very long sales tax exemption ends. The profits tax waiver is very likely to deliver ahead some long run need into the second 50 % of 2020 and 1st 50 percent of 2021.”

MIDF Research reported the world chip scarcity could have a likely influence on auto manufacturing.

“Recent information circulation implies that selective gamers these types of as Proton may possibly be wanting to scale down generation, but we would bear in mind that for Proton’s Geely-primarily based SUV designs (X70 and X50), localisation level is however small at all-around 40%.

“This suggests that it is however incredibly reliant on the Chinese automotive source chain, which is hit challenging by the chip shortage concern.

“While the influence may not be uniformed throughout the board, our channel checks with selective non-nationwide gamers lately implies manufacturing is nonetheless operating as per normal without any supply constraints so considerably.”

The investigation household is remaining cautious must the impact of the chip lack capture up with manufacturing in Malaysia.

According to the MAA, complete field quantity (TIV) had hit 529,434 models in 2020.

This was, having said that, 12% reduce than the 604,281 units obtained in 2019.

The fall in TIV can be attributed to the disruptions to companies as a outcome of the MCO that was applied past March to suppress the spike in Covid-19 infections.

Most motor vehicle providers were compelled to shut down their operations and have been only authorized to resume just about two months, underneath rigid typical working processes.

Having said that, TIV for every single solitary month of 2020 given that June had been regularly increased than 2019.