KUALA LUMPUR: RHB Investment Bank Bhd (RHB Research) forecasts a total industry volume (TIV) of 730,000 units for the automotive sector in 2025, indicating an eight per cent year-on-year decline from its 2024 projection of 790,000 units.
The firm anticipates a softer TIV with a high base effect and no compelling factors for 2025 auto sales to remain at the current elevated levels.
"We believe the decline will primarily be driven by non-national marques, which continue to face intensifying competition due to the entry of new players, particularly Chinese carmakers.
"Some car buyers may delay their purchases in anticipation of further price cuts from both existing and new non-national marques, which could destabilise the non-national segment," it said in a note today.
RHB Research maintains a "Neutral" stance on the sector, citing a cautious outlook for 2025 as the industry lacks catalysts to sustain its sales momentum.
The cautiousness is attributed to ongoing price competition among non-national marques, while softening order backlogs signal tempered expectations for 2025.
The firm's top picks remain Bermaz Auto Bhd (BAuto), for its attractive valuation and higher-than-sector-average dividend yield, and Sime Darby Bhd (Sime), for its strong positioning for the RON95 rationalisation and broad electric vehicle (EV) lineup.
It noted that Sime's stake in Perodua also helps mitigate earnings risks amid intensifying competition among non-national marques.
"Generally, the performances of the auto sector players met expectations, as both SIME and MBM Resources Bhd met our forecasts.
"Meanwhile, results from Tan Chong Motor Holdings Bhd (TCM) and BAuto fell short of our estimates," it added.
In Nov 2024, the Malaysian Automotive Association (MAA) reported a total industry volume (TIV) of 67,500 units, bringing the year-to-date (YTD) TIV to 731,000 units—a 1.4 per cent year-on-year (YoY) increase compared to the first 11 months of 2023 (11M23). However, TIV weakened month-on-month (MoM) in Nov, with major carmakers posting softer sales numbers.
Toyota led the decline with a 6.7 per cent MoM drop in sales volume, followed by Perodua (-5.7 per cent) and Proton (-5.0 per cent).
In contrast, Honda bucked the trend, recording a 12.7 per cent MoM increase in sales volume.