Kenanga Research raises 2024 automotive TIV forecast to 740,000 units

KUALA LUMPUR: Kenanga Research has raised its 2024 total industry volume (TIV) forecast for the automotive sector by four per cent to 740,000 from 710,000 units, in line with the Malaysian Automotive Association (MAA) forecast.

In a note today, the research firm said it believes the launch of new electric vehicles (EVs) on boats and recent road tax cuts on EVs will help stimulate demand for EVs.

“Recall that all current EV lines are imported and have a regulated minimum price of RM100,000, as well as a cap on the number of units distributed per month.

“On the other hand, we believe that while it will be business as usual in the affordable segment, fuel subsidy rationalization is more likely to hurt demand for mid-range models, giving rise to a local two-speed automotive market in 2024.” it said.

Kenanga Research opined that in the low-cost segment, target customers such as the B40 group would avoid the impact of the upcoming rationalization of fuel subsidies and could potentially benefit from the introduction of a progressive remuneration model.

However, it added that the same cannot be said about the mid-range segment as its target customers, the M40 group, may refrain from buying a new car after the rationalization of fuel subsidies.

“Overall, industry earnings visibility continues to be good, as evidenced by the booking book of 200,000 units at end-May 2024.

“More than half of the backlog is new models, which reflects the attractiveness of new models for car buyers. This trend is likely to continue throughout 2024 given the wide range of new launches,” he added.

The research house also believed that a new car remains an affordable luxury for most Malaysian households due to strong consumer confidence, affordability and attractive new models despite high inflation and a slowing global economy. – Bernama