AmInvestment Bank Bhd has maintained a ‘Neutral’ call on the automobile industry amid expectations of the total industry volume (TIV) chalking up a 0.8% growth in 2019 to 603,000 units.
The research house said the Malaysian automobile industry would continue to face headwinds on lingering issues and is expected to remain challenging in a competitive business environment.
“We believe the sector will be challenged by external and domestic economic uncertainties in the long run. Strong growth in vehicle sales will ultimately depend on higher wage growth and an improvement in economic conditions to lift households’ confidence levels,” it said in a note.
However, AmInvestment noted that there are potential short-term rerating catalysts in the local automotive space, due to the revised National Automotive Policy 2019 and the New National Car Project, to be announced later this year.
“We hope these projects will not be just merely about creating another automobile, but towards creating a catalyst for the development of the local automotive ecosystem,” it added.
On the national car sales, AmInvestment opined that sales volume would continue to be strong and steady going forward, underpinned by new launches.
“For example, recent facelifts of the Iriz, Exora and Persona as well as upcoming launches of the facelifted Saga and X50.
These models are very affordably priced and cater to the mass market targeted towards consumers in the low-medium income group,” it said. — Bernama