KUALA LUMPUR: RHB research is projecting a 14 per cent fall in total industry volume (TIV) to 625,000 for automotive (auto) sales in 2024, on easing of delivery backlog of major marques and no major catalyst for sales.
"We are anticipating a softer TIV, as we do not see any compelling factors for 2024 auto sales to book another year-high. "Our Top Pick is still Bermaz Auto as we still like its 10 per cent dividend yield and believe its car sales will remain resilient vs that of other marques," it added.
The firm kept its "Neutral' call on the sector.
It said delivery backlogs of major marques such as Perodua and Toyota, have decreased from 155,000 and 40,000 as of end-August to 140,000 and 34,000 as of end-November, supporting its hypothesis that TIV in 2024 will likely soften year-on-year (YoY), especially after the two solid years (2022 and 2023).
"While there are upcoming launches of new electric vehicles (EVs) within the 2024 pipeline, e.g. BYD Seal, Volvo EX30, and Toyota bZ4X, we do not think this will significantly move the 2024 TIV needle," it said in its note today.
RHB Research said given the average trailing 12-month average is 66,000, it is safe to assume that 2023 will be another record-breaking year for TIV, likely due to downtrading activities to cheaper cars. "However, we believe the market has already priced in the potential of another record-breaking year in 2023," it noted.
It added the sector's results for the third quarter (Q3) of 2023 came in above estimates, mainly as average selling prices (ASPs) surprised on the upside.
Sime Darby Bhd, UMW Holdings Bhd and Bermaz Auto Bhd's performance exceeded expectations,while Tan Chong Motor fell short of expectations as it fell further into the red.