KUALA LUMPUR: RHB research expects total industry volume for car sales to fall to 625,000 in 2024, after hitting an all-time high of 799,000 in 2023.
It maintained neutral call on the auto and auto parts industry in Malaysia.
Total production volume was 774,000 units in 2023.
According to the research house, it is cautious on the 2024 outlook premised on a lack of catalysts to drive sales and earnings to a new high.
"We believe the sales volumes were mainly a result of pent-up demand supported by new launches during the year. "Notably, 2H23 TIV was 18 per cent higher than 1H23 TIV, considering the final push by companies to deliver the orders in the second half. "We expect 2024 forecast TIV to soften to 625,000 given the lack of catalysts that could drive sales to another high, with our top pick being Bermaz Auto (BAUTO), due to its 10 per cent yield and relatively resilient car sales" it said in a note today.
The softening of order backlogs also suggests a more subdued expectation for 2024, it said.
On the other hand, electric vehicle sales more than tripled to 10,000 units during the year, which made up 1.3 per cent of total TIV from a meagre 0.4 per cent in 2022.
Within the EV sphere, BYD led the local EV adoption as it accounted for 37 per cent of the total local EV market in 2023 – just nine months since its maiden foray into Malaysia.
In 2024, RHB research expects more EVs to be on the road, joined by recently launched sub-RM250,000 models such as Tesla's Models 3 and Y, Neta's V, and the Smart #1, which is distributed by Proton's subsidiary Pro-Net.
"Regardless, we think the EV market share will continue to hover around current levels and only meaningfully increase post 2025 after the RM100,000 pricing floor on complete built unit EVs expire and when local carmakers have their own EV offerings," added RHB research.