High Order Backlog Continues To Drive Car Sales - HLIB

Hong Leong Investment Bank (HLIB) Research maintained its forecast of 700,000 units for 2023 in a research note issued today, with TIV expected to normalise to 650,000 units in subsequent years.

It stated that OEMs with high order backlogs include Perodua, Proton, Toyota, Honda, and Mazda, and that these high backlogs would ensure strong sales volume into 2H 2023.

“Despite the anticipated strong electric vehicle (EV) growth, we reckon its overall market share will be relatively immaterial.

“Hence, we maintain ‘Neutral’ on the automotive sector as sales will likely normalise downwards into 2024,” it said.
According to HLIB Research, the government has been encouraging more EV usage through accommodating EV policies in terms of EV demand. It stated that EV sales would reach 2,631 units (0.4 percent of TIV) in 2022, up from 274 units in 2021, led by BMW, Mercedes, Volvo, and Hyundai.

“We anticipate continued EV sales growth in coming years, driven by aggressive new EV model launches by existing OEMs and new entrances such as BYD, GWM, Tesla and others,” it said.

HLIB Research, on the other hand, predicted that overall EV sales would remain relatively insignificant (in terms of market share) in the near term due to the relatively high-priced EV market (RM145,000 and above) and a lack of EV infrastructure.

“Recently, Neta V (Careplus) was launched at RM100,000 in May, while BYD (Sime) is expected to introduce the more affordable Dolphin at slightly above RM100,000 by year-end,” it said.