KUALA LUMPUR: Malaysia's total industry volume (TIV) is targeted to hit 610,000 units this year with the sub-compact (B-segment) sport utility vehicle (SUV) continuing to lead market and drive sales.
"We expect TIV to be relatively tepid in 2020 but a planned restructuring of (import) duties aimed at reducing vehicle prices will catalyse volume growth," Maybank IB Research said in a note on Wednesday.
However, Kenanga Investment Bank is more optimistic, forecasting TIV at 612,000.
Maybank said several new models, especially in the second half of 2020, would excite the market such as Proton's completely knocked down (CKD) X-70 and completely built up (CBU) X-50 models as well as Perodua D55L compact SUV, which is modelled after Daihatsu Rocky, thereafter.
Meanwhile, Nissan will likely roll out its much-anticipated all-new Almera, while Toyota (four models) and Honda (three-four models) will compete with several launches.
Overall, Maybank IB expects Perodua to continue to retain market leadership and anticipated Proton as well as Nissan marques to gain some market share.
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"With the competitive launches, competing marques, especially in the B-segment, will likely be aggressive in their advertising and promotional expenses for market share and volume sales, at the expense of margins.
"That said, talks of a plan to restructure duties, aimed at reducing vehicle prices will be much welcomed, for it will be a catalyst to stronger vehicle sales beyond our 610,000 TIV target," it added.
Maybank IB also believes that the much anticipated National automotive Policy (NAP), which is scheduled to be unveiled in early 2020, will be the most scrutinised versus its predecessors.
"It is crucial for the policymakers to get it right this round for it will shape the direction of the nation’s automotive industry, in terms of competition and attracting foreign direct investments, in a challenging yet revolutionising market."
A sharp turn in consumer sentiment may affect vehicle sales, it said.
Additionally, it noted that foreign exchange volatility especially the ringgit against the US dollar and yen would affect margins of auto players exposed to these currencies.
