KUALA LUMPUR, April 28 (Bernama) -- Perusahaan Otomobil Kedua Sdn Bhd (Perodua) is expected to benefit the most from Malaysia’s automotive industry in 2025, driven by forward-buying interest due to the deferment of new excise duty regulations until the end of the year.
Kenanga Investment Bank Bhd (Kenanga IB) said that Perodua is poised to capture 44 per cent of the total industry volume market share, with the highest localisation rate, which could have resulted in prices of locally assembled vehicles increasing by 10 per cent to 30 per cent.
“(Additionally, Perodua will benefit from) attractive new launches -- Perodua hybrid, Perodua EV, and all-new Perodua Myvi, higher household income -- government servants’ salary hike in December 2024, and higher minimum wages starting February 2025, and a stable labour market,” it said in a note, today.
However, Kenanga IB said that the same cannot be said for the premium segment, as its target customers -- the upper-tier M40 and T15 groups -- may hold back from buying new cars, down-trade to smaller cars, or switch to hybrids and electric vehicles (EVs) to cut their fuel bills following the introduction of fuel subsidy rationalisation.
“Concurrently, household bills will also be affected by higher fuel costs, as well as the expected 14 per cent increase in base tariff for higher-end usage, which could drive consumers to switch to solar panels, in turn boosting the demand for EVs to funnel the excess grid electricity -- essentially free energy.
“Additionally, EV routine maintenance costs are considerably lower than those of internal combustion engines due to fewer moving parts and wear-and-tear parts,” it said.
Kenanga IB maintains an “overweight” rating for the sector, with MBM Resources (“outperform”; target price (TP): RM6.90) and Hong Leong Industries (“outperform”; TP: RM15.90) as its sector picks.
“These companies are strong proxies to the affordable vehicle market and the fuel subsidy rationalisation programme, in addition to offering attractive dividend yields of approximately eight per cent and five per cent, respectively,” it added.
-- BERNAMA
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