KUALA LUMPUR: Kenanga Investment Bank Bhd forecasts the automotive sector’s total industry volume (TIV) to lower to 420,000 units from its initial expectation of 560,000 units, due to the movement control order (MCO) and the economic slowdown.

In a research note, it said the Malaysian Automotive Association reported that the TIV for March 2020 declined by 59 per cent year-on-year (y-o-y) to 22,478 units.

It added that both month-on-month and y-o-y sales growth skidded downhill due to the MCO, which started on March 18.

Kenanga Investment said for the first three months of the year, TIV stood at a total of 106,428 units - accounting for 25 per cent of its 2020 renewed sales target.

“National marques are expected to continue surpassing non-national marques, driven mainly by Proton’s robust sales growth and supported by Perodua to cushion the impact,” it said.

There were no sales expected for April 2020 due to the extension of the MCO to May 12, with showrooms closed across the country.

“If there is no extension, we expect a slight recovery in delivery of new models after May, probably in the second half of 2020 (H2 2020) after the fear inflicted by the Covid-19 pandemic subsides.

“There could be some relieve in H2 2020 due to exciting new launches, especially from the non-nationals, better incentives programme under the National Automotive Policy 2020 and pre-emptive measures to assist those who might be financially challenged by COVID-19 impact,” it said.

However, it noted that the industry’s performance would depend on the outcome of containment measures and whether the movement restriction would be extended.

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