AmInvestment Research expects strong vehicle sales volume momentum to continue throughout the first half of this year, supported by the extension of the Sales and Service Tax (SST) exemption from 1 January to 30 June 2021.
Last February, the automotive sector recorded a good total industry volume (TIV) of 42,800 units, driven mainly by the increasing number of visitors to showrooms after the Movement Control Order (PKP) expired in most states across the country.
"We are confident that the SST exemption will continue to drive buying interest in passenger vehicles, especially for national brands, Proton and Perodua," he said in a research note today.
“We expect the TIV for March 2021 to be higher in terms of month -on -month supported by the full service of the Road Transport Department (JPJ) which is resumed for all types of vehicle transactions.
"We maintain our 'overweight' stance on the automotive sector with the TIV projection unchanged at 575,000 units this year," he said.
Meanwhile, Kenanga Research expects new launches such as the Perodua ATIVA, Proton X50, Honda City and Nissan Almera to help drive sales along with booking arrears and continue to be driven by the extension of the SST exemption until June 30, seasonal promotions and more new launches expected in the second half. this year.
“Overall, 2021 has the potential to be a better year along with better incentive programs under the National Automotive Policy (NAP) 2020, the positive impact of Bank Negara Malaysia's (BNM) Overnight Policy Rate (OPR) reduction and the initial steps that reducing the impact of Covid-19.
"We see that the expected recovery in global growth and the impact of the substantial fiscal stimulus on the domestic economy will lead to a projected resumption of Gross Domestic Product (GDP) growth of 4.5% this year," it said in a separate note today.
Kenanga Research also maintained an ‘overweight’ recommendation on the sector with a TIV 2021 target of 585,000 units.
