Automotive sector

Kenanga Sees Strong Auto Sector Recovery in 2022 | Money

Employees work on an assembly line at Proton’s manufacturing plant in Tanjung Malim on December 16, 2019. – Reuters pic

KUALA LUMPUR, Dec. 22 — The country’s auto sector is expected to experience a stronger recovery next year, with total industry volume (TIV) rebounding 19 percent year on year to 600,000 units from a forecast 505,000 units for 2021, said Kenanga Investment. Bank Bhd.

The investment bank’s projected TIV of 505,000 units represents a contraction of 5% from total 2020 sales of 529,434 units.

Kenanga, which maintains its “neutral” appeal to the automotive sector, said it expects a dynamic recovery in car sales as economic activities reopen, still driven by the 100% sales tax exemption. on completely knocked down (CKD) passenger vehicles and 50% off completely built units (CBUs), including sport utility vehicles and multi-purpose vehicles, for six months through June 30, 2022.

“(It is) particularly with the growing number of pending reservations for popular models with our TIV 2021 target at 505,000 units, beating the Malaysian Automobile Association (MAA) TIV 2021 target of 500,000 units.

“We expect a stronger recovery next year with a target of 600,000 TIV units for 2022, which closely matches the MAA’s target of 605,000 TIV units (+21%),” he said. he stated in a research note.

Meanwhile, Kenanga said its TIV growth in 2022 would be driven by the sales and services tax exemption in the first half of calendar year 2022, the expected recovery of the economy from the lockdown and the assumption that herd immunity would be reached, leading to a relaxation of standard operating procedures in a bid to revitalize local travel.

The easing of restrictions, along with the resumption of supply of semiconductor chips, is expected to boost demand for passenger vehicles, especially affordable domestic brands, he said.

“Nevertheless, for some models, the resumption of automobile production could be limited by the current global constraint on the supply of semiconductor chips,” he said. — Bernama