Research firms expect auto sales to trend down in 2024

KUALA LUMPUR: Malaysia's automotive sector total industry volume (TIV) is expected to trend downward in 2024 as the impending fuel subsidy rationalisation is likely to hurt the demand for mid-market models while affordable vehicle sales remain optimistic.

Kenanga Research anticipates new vehicle sales of 710,000 units while Hong Leong Investment Bank Bhd (HLIB) foresees 2024 TIV at 720,000 units compared with the 740,000 units projected by Malaysia automotive Association (MAA).

According to HLIB, Malaysia's TIV achieved a new record high of 799,600 units last year.

Kenanga Research noted industry earnings visibility is still strong, backed by a booking backlog of 200,000 units as of end-January 2024, unchanged compared to a month ago.

"We expect a similar trend in calendar year 2024 (CY2024) given the equally strong line-up of new launches.

Meanwhile, excitement is building in the electric vehicle (EV) segment with the new launches of BYD Seal and Tesla Model 3, with the expected introduction of the locally-made first national EV (Perodua and Proton) in 2025," said the research firm in a note today.

Kenanga Research believes a new car is still an affordable luxury for most Malaysian households despite the high inflation and a slowing global economy underpinned by strong consumer confidence supported by a stable economy and a healthy job market.